74 /2 >Af ^y - Senate H e a r tn ^ f^ n 12]$ Before the Committee on Appro priations (,() \ ER WIIA

Storage ime nts F EB 1 2 « T H e -,M

Fiscal Year 1976

th CONGRESS, FIRS T SES SION

H .R . 986 1

SPECIAL HEARING

F - 1 8 NA VY AIR CO MBA T FIG H TER

HEARING BEFORE A SUBC OMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE NIN ETY-FOURTH CONGRESS

FIR ST SE SS IO N

ON H .R . 9 8 6 1 AN ACT MAKIN G APP ROPR IA TIO NS FO R THE DEP ARTM EN T OF D EFEN SE FO R T H E FI SC AL YEA R EN DI NG JU N E 30, 1976, AND TH E PE RIO D BE GIN NIN G JU LY 1, 1976, AN D EN DI NG SEPT EM BER 30, 1976, AND FO R OTH ER PU RP OSE S

P ri nte d fo r th e use of th e Com mittee on App ro pr ia tio ns

SPECIAL HEARING

U.S. GOVERNM ENT PRINT ING OFF ICE 60-913 O WASHINGTON : 1976 SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS JOHN L. MCCLELLAN, Ark ans as, Chairman JOH N C. ST ENN IS, Mississippi MILTON R. YOUNG, No rth D ako ta JOH N O. P ASTORE, Rhode Island ROMAN L. HRUSKA, N ebraska WARREN G. MAGNUSON, Washin gton CLIFFORD I’. CASE, New Je rse y MIK E MANSFIEL D, Montana HIRAM L. FONG, Hawaii GALE W. McGEE, Wyoming TE D STEV ENS, Alaska WILLIAM PROXMIRE, Wisconsin RICH ARD S. SCHWEIKER, Pennsylva nia JO SE PH M. MONTOYA, New Mexico DANIEL K. INOUYE, H awaii

Ex Officio M embers F rom th e C om mittee on A rmed S ervices STUART SYMINGTON, Missouri STROM THURMOND, South Carolina HENRY M. JACKSON, Washin gton J ames R. C alloway Chief Counsel and Staff Director Guy G. M cConnell , R ichard D. L ieber man , D ouglas A. A llen , J ames A. F ellenbaum , and J oel E. B onner (Mino rity ) Staff A ssistants, Department of Defense Appropriations Subcommittee C O N T E N T S

CONGRESSIONAL WITNESSES Page Opening remarks of chairman______1 Stateme nt of Hon. Daniel K. Inouye, U.S. Senator from Haw aii______4 Statement of Hon. Barry Goldwater, U.S. Senator from Arizona______6 Letter from Pr at t & Whitney______15 Hon. Lawton Chiles, U.S. Senator from Florida : Letter from______20 Statement of______29 Prep ared statement of Hon. John Tower, U.S. Senator from Texas_____ 38 GEN ERA L ACCOUNTING OF FICE Statement of Paul G. Demhling, General Counsel______41 NONDEPA RTMENTAL WITNESSES Statement of George A. Spangenberg, McLean, Va______49 DEP ART MENT OF DE FENSE

Offic e of the S ecretary Statement of William P. Clements, Deputy Secretary of Defense______69 Letter from : William P. Clements, Deputy Secretary of Defense______73 Hon. George Mahon, U.S. Representative from Texas______74 Hon. John L. McClellan, U.S. Senator from Arkansas______74 Prep ared stateme nt of Vice Adm. William D. Houser, USN, Deputy Chief of Naval Operations (Air Warfare)______95 DEPARTMENT OF TH E AIR FORCE Stateme nt of Lt. Gen. James Stew art, Commander, Aeronautical Systems Division, Wrig ht-Patterson AF Base, Ohio______103 Questions submitted by Hon. Strom Thurmond, U.S. Senator from South Carolina ------104 (in)

DEPARTMENT OF DEFENSE APPRO PRIATION S FOR FISCAL YEAR 1976

TU ESDA Y, OCTOBER 21, 1975 U.S. S enate, Subcommittee of the C ommittee on A ppropriations, Washington, D.G. The subcommittee met at 10 a.m. in room 1223, Everett McKinley Dirksen Office Building, Hon. John L. McClellan (chairman) presiding. Present: Senators McClellan, Pastore, Inouye, Young, Hruska, Stevens, and Symington. Also present: Senators Chiles and Goldwater. F-18 NAVY AIR COMBAT FIGH TE R

OPEN IN G RE MAR KS BY CHA IR M AN

Chairman McClellan. The subcommittee will come to order. The Chair will make a brief statement. On May 5, 1975, this sub­ committee held a hearing on the lightweight fighter aircraft program, including the F-16 and F-18. These are expensive programs and they have generated considerable interest and some controversy. This hearing today has been called to further insure that the com­ mittee members have the opportunity to hear all of the pertinent facts and get full and detailed information relating to the lightweight fighter program. Subsequent to our hearing on May 5, the subcommittee heard De­ partment of Defense witnesses concerning the GAO investigation of the memorandum of understanding for the F-16 sale to Europe. We hope these hearings today will complete our inquiry into the F-16 pro­ gram, including the GAO decision on the protest of the LT\ aero­ space contract award for the F-18.

SUMMARY ON GAO DECISION AND MEMORANDUM At this point I will insert in the record a summary of the GAO decision on the LTV protest and a copy of a memorandum which I sent to each member of this Defense Subcommittee regarding this meeting today. The full GAO decision will be retained in the com­ mittee files. [The summary and memorandum follow :] (D 2

Decision of the C omptroller G eneral of th e U nited S tates B-183851 Re LTV Aerospace Corp. October 1,1975. 1. Protest raising issues concerning inte rpretation of appropriation act and ‘‘congressional intent” as public policy will be considered in this case involving selection of a Navj’ Air Combat Fighter (NACF), whether or not timely filed, since protest raises significant issues concerning relationship of Congress and Executive on procurement matters. Issues regarding evalu ation and competition will also be considered since they are substantially intertwined with first issue and since GAO has continuing audit inte rest in NACF program. 2. Navy is not required as ma tter of law to expend funds provided in lump-sum appropriation act for a specific purpose when statute does not so require, not­ withstanding language contained in Conference Report. Absence of statutory re­ striction raises clear inference that the Report language paralleled and comple­ mented, but remained distinc t from, actu al appropriation made. Therefore, Navy selection of p articu lar aircraft design for its Air Combat Figh ter and resultant award of sustaining engineering contracts cannot be regarded as contrary to law. 3. While protester argues contract award by Navy should be regarded as void since it is not in accordance with public policy as expressed in congressional Con­ ference Rei>ort, awa rd is not contrary to statute, contract does not require any actions contrary to law, and does not represent a violation of moral or ethical standard s. Therefore no basis exists to conclude that award is contrary to public policy. 4. Although protester argues tha t Navy did not comply with DOD reprogramming directives, those directives are based on nonstatutory agreements and do not provide a proper basis for determining the legality of expenditures. 5. Provision in appropriation act which prohibits use of funds for presenting certain reprogramming requests cannot operate to invalidate contract awards even if awa rds resulted from reprogramming action since a violation of such pro­ vision cannot serve to invalidate an otherwise legal contract award. 6. Protester’s assertion that Navy properly could select only derivative of model selected by the Air Force is incorrect, since reasonable inte rpretation of RFQ, read in context of applicable documents, indicates that Navy sought air craft with optimum perform ance (within cost parame ters) and with due consideration of design commonality with prior Air Force prototype program and with selected Air Force fighter. 7. Protester’s claim that Navy did not tre at offerors on equal basis is not ported by record, which indicates tha t overall evaluation was conducted in ac­ sup­ cordance with established criteria and that both offerors were treated fairly. 8. Assertion that engine selected by Navy was not authorized for use with light­ weight fighter is w ithout merit, since record indicates selected engine is modified version of baseline engine listed in solicitation. Also, record indicates Navy did not improperly estim ate offerors’ engine modification costs. 9. Navy’s cost evaluatio n of competing proposals was conducted in accordance with proper procedures and established criteria since the Navy’s development of its own estimates in determining cost credibility was consistent with sound pro­ curement practices and awa rd of contract to higher priced offeror was not improper. 10. Restriction of competition in Navy procurement for Air Combat Fighter (ACF) to offerors furn ishing designs derived from Air Force ACF program was proper even though Navy selected derivative of design different from that chosen by Air Force, since solicitation was intended to maximize commonality of both technology and hardware between Air Force and Navy designs and Navy selec­ tion was in accordance with solicitation criteria regarding commonality.

conclusion For the various reasons discussed above, we have concluded that the Navy’ actions were not illegal or improper and that therefore the protest must b denied. As indicated in the Introduction section, the Congress has manifested sis nificant inte rest in DOD's LWF/ACF programs and has closely monitored th Navy a atte mpt to develop a lightweight, low cost fighter that could operat a i r c r a f t carriers. The stateme nt in the Conference Report oi the 197o DOD Appropriation Act that “future funding is to be contingent upoi 3 the capability of the Navy to produce a derivative of the selected Air Force Air Combat Fighter design” suggest that the Congress will be closely scrutinizing the Navy’s choice before full-scale development funds will be provided. Thus, the ultimate determination regarding furth er F-18 development has yet to be made. E lme r B. Staats, Comptroller General of the United States.

U.S. Sen ate, Com mittee on Appr opria tio ns, Washington, D.C., October 10,1975. Memorandum to: Members, Defense Appropriations Subcommittee. From : John L. McClellan, Chairman. Subje ct: Hearing on F-18 Navy Air Combat Fighter. The Committee will hear Department of the Navy witnesses regarding the Navy Air Combat Fighter on Tuesday, October 21. at 10 :00 AM. Several members have requested th at the hearing be held to inquire into the controversy surrounding the GAO report on the Ling-Temco-Vought appeal to the selection of the F-18. Other areas of inquiry will be the cost estimate, the lack of commonality with the Air Force F-16, and the alleged inferio r capa­ bility of the F-18 vis-a-vis the F-14. I hope you will be able to attend the hearing. Congressional W itnesses

STA TEM EN T OF HON . D A N IE L K. IN OUYE, U.S . SE NATO R FR OM H A W A II INTROD UCT ION OF WITNE SSE S Ch air ma n M cClellan. We have a num ber of witnesses to be heard today. Among them are Se nator Dan iel Inouye, Senator Barry Gold- water, Senator Law ton Chiles, Senator J oh n Tow er, Hon. Pa ul Dem- blin g, Gen eral Counsel o f th e Gen eral Acc oun ting Office, Hon. George A. Spa nge nberg, forme r Direc tor of the Ev aluatio n Division of the Naval A ir Systems Command, and also H on. W illiam P. Clements, Jr ., De puty Secre tary of Defense. Se nator Young, is th ere a ny statem ent before we proceed? Se nator Y oung. I have no state ment. Ch air ma n M cClellan. Senator Ino uye, we will hear these witnesses in ord er, unless there is an objection. You are recognized.

STATEMENT OF SENATOR INOU YE

Se nator I nouye. I have a sta tem ent which I wish to include in the reco rd as tho ugh read in person, sir. Ch air man M cClellan. Very well, th e sta tem ent of Senator Inouye will be printed in the record at this point. Senator I nouye. There are several issues related to the development of the lig htwe igh t fighte r prog ram—or the Navy ai r combat figh ter program , as it was designated by Congress— which are deserving of fu rthe r exploration. PROGRAM CONTROVERSY Fir st of all, everyone here is well awa re o f the controversy s urround­ ing the selection of th e F -18. The Nav y decided tha t they could no t use any deriv ative of the YF- 16 because they could not be made carrier suitable . In fact, the Navy decided to select the loser of the A ir Force pro totype fly-off competition. Moreover, although the Congress directed the N avy to tak e advan­ tag e of the Air Force lig htwe igh t figh ter pro gra m and technology gen erated by an ongoing program , the Navy did not rea lly comply with the intent of Congress. Congress canceled the V FA X pro gram, renam ing i t the Navy ai r com bat fighte r program (N ACF) , bu t it is curious th at the Navy has ended up with wh at it wan ted, which is essentially a V FAX aircraft. As my colleague the Honorab le Mr. Chiles is well awa re from the heari ngs which his committee held , the commonality which Congress directed th at the Navy and the Air Force obtain in a lig htw eig ht fighte r in a conference repo rt accepted by both Houses of Congress was never obtained and all pro spect of interservice c ommonality was quickly lost. (4) 5

“fly before buy” prin ciple The second point tha t I would like to touch on is the concept of flying before buying. No one can dispute the fact that the F-18, although it is a derivative of the YF-17, has never been tested, because one could hardly fly a plane that has not yet been built. There can be no questioning of the fact that the selection of the F-18 violates the principle of fly before buy, which calls into question the performance of the F-18 and its capability to execute its assigned mission within the Navy. The Navy ostensibly wants the F-18 to complement the F-14. I am advised that the F-18 is indeed a more capable aircraft in the area of close-in combat or dogfighting for it is a lighter and more maneuverable plane. But perhaps we should question the need for a dogfighter at the present time. We might then ask just how the F-18 would be used by the Navy and which jobs it can do tha t the F-14 cannot perform with greater capability. What we might also want to ask is how the F-18 fits in with the future plans of the Navy. The idea of incorporating a V/STOL, a vertical, short-takeoff and landing fighter-attack aircraft into the Navy’s inventory sometime in the future is not a remote possibility. I question the advisability of the Navy’s decision to lock into a program through the tu rn of the century. At the very least, the Department of Defense and the Navy should provide Congress and this committee with a clear picture through justification of each aircraft as it would fit into the present and any future configuration of airc raft carriers in the Navy and the Marine Corps. COST OF F - 1 8 PROGRA M More to the point, however, is the cost of the F-18 program. The Department of Defense in 1974 and on May 6,1975, claimed the light­ weight fighter would be less capable but about half the cost of the F-14 and F-15. Yet Navy testimony has shown that the cost of acquiring the F-18 or the cost of that program through 1985 will cost $700 million more. Also, Navy data which was made available to Congress shows th at the 400 additional fighters they need will cost, in 1975 dollars, $5.36 billion, as opposed to $4.6 billion for additional F-14’s. The second 400 F-18 aircraft to replace A-7 aircraft acquisition will cost $2.4 billion, as opposed to $1.66 billion for the A-7. Hence, the alternative of buying more F-14’s and A-7’s would cost $6.26 billion and would, therefore, be less expensive than buying 800 F-18’s at a cost of approximately $7.77 billion. The difference is approximately $1.51 bilhon. This is, of course, the cost of acquiring more F -14’s and A-7’s versus buying F-18’s and does not include the operations and maintenance costs for either aircraft. Nor does it include or in any way take into account the future replacement of A-7's in the Navy’s force. But in all the figures that have been thrown around comparing these Navy aircraft, no cost growth has ever been allowed on the F-18. Yet the Department of Defense testified tha t the average cost growth of the last 10 major programs was approximately 13.2 percent. 6

There has been so much confusion over th e cost of the F -1 8 pro gra m and th e pe rformance of the F- 18 its elf th at I see a gr eat deal of danger in moving ahead with th is p rog ram . Pe rhap s the F- 18 program should be canceled. Pe rh ap s many of my colle agues think th at the Na vy’s F-18 program is worthy of supp ort. But if the Nav y trul y has wh at it needs to meet the t hr ea t of the future, then it has a responsibility to provide this committee with ade quate inf orma tio n abo ut the Na vy’s future p lan s in order t hat we can make a well-inform ed and caref ull y considered decision to continu e the F- 18 pro gra m, to delay th at pro­ gram aw aitin g proo f of its wo rth or to cancel th at prog ram on just grounds. Tha t is my statem ent, sir. Ch airma n M cClellan. I f you have no thing f ur th er to add to you r statem ent, we will proceed with our ne xt witness.

STATEMENT OF HON. BAR RY GOLDWATER, U.S. SENATOR FROM ARIZONA

OPP OSITION TO METHOD OF OBTAINING AIRCRAFT

Ch airma n M cClellan. Senator Gold water, as a disting uished mem­ ber of the Armed Services Com mittee, as well as a pilot in your own rig ht, you hav e possibly more knowledge about air planes th an any oth er man in the Senate. We certainl y welcome your counsel on the problem confronting Congress res pecting this lig htwe igh t fighter plane. You may proceed. Senator G oldwater. At the outset I wa nt to tell you th at th is is one of the most unp leasan t mom ents th at I will go th roug h because I d on’t believe, in my years in the Congress, I have ever opposed a weapons system . T wa nt to make it clear th at I don’t oppose the F- 18 weapons system. I oppose the way th at they have gone about obtainin g it. I apprec iate the oppo rtu nity to make a state me nt to this subcom mit­ tee on the F -18 airc raft p rog ram . I ha ve concluded, after much review, th at the prog ram should not proceed as now planned and I will have some rec ommen dations fo r you l ater on in my statem ent. I would like to stress t hat th e conclusions I have come to about thi s pro gra m are not the res ult of any pa rticular political inte rest. Cer­ tainly I am fully awa re of the heavy pressures being exe rted , bu t I have no special ax to gri nd in that re gard. There for e, as best I can, I will give you my objective opinion of the lig htwe ight fighte r pro gra m wi th pa rti cu lar reference to the F-1 8. After my many years in the Congress, I like to t hink we have the collective wisdom to make the correc t jud gm ents necessary to keep America No. 1 in nation al defense. How ever, I do not th in k we have done very well in th at rega rd with this pro gram. In fac t, the lig htwe ight fighter pro gra m as it has developed is a mess, and we a re no closer to com mon ality between the Nav y and Air F orc e than when we start ed. cost savings as a result of commonality Not on ly th at , b ut each service will lie ad ding another, but different, airc ra ft to its own tactical ai r force. These are tactical ai r forc es th at I feel are, in essence, str uctur ed to do abo ut the same thing, a t least to the point where the re could be m ore com monality and subsequent cost 7 savings th an we will rep orted ly get from this and the A ir For ce pro gram. I migh t interjec t, Mr. Ch air man—because you and I hav e discussed this—it is easy to talk about commonality in A ir Force an d N avy fig ht­ ers, bu t you can’t buy an ai rc ra ft f or one a nd the n make it common to both. If you are g oin g to make the ai rc ra ft common, it h as to st ar t in the core desig n because an airplan e adaptab le fo r c arrier lan ding s w ill require approx im ate ly a 10-percent increase in w eight a nd this increase in weight requires also different engines to achieve the same type of performance from Nav y opera tions as the A ir For ce gets from lan d operations. So if we are going to tal k about commonality it has to star t righ t at the desig n table and not go from , let us say, the F- 16 to take th at now and try t o make a Nav y fig hte r out of it. Ch air ma n M cClellan. Will the Se nator yield at th at point ? In order to have a common plane, does it n ot require a compromise of the Air For ce plane in order to accommodate the Nav y pla ne, the extra weight an d stre ng th ? Senator G oldwater. Yes, but it is ra th er difficult— in fac t, I would say it is almost impossible—to take an existing A ir F orc e fighte r and make it into a N avy fighter. Now, we can go the othe r way. We took the F-4 , the N avy developed and designed a fighter and adapte d it to A ir Force. In fact, it prob ably turned ou t to be a better ma neuvering airc ra ft because less we igh t is required. If we are going to ta lk about comm ona lity, we should n’t t al k abo ut it af te r one air plane has been accepted, pa rti cu larly a land-b ase d air ­ craft. So when I talk about com monality I wan t to make it clear th at we ar e t alki ng about startin g fro m sc rat ch and, as I develop my ar gu ­ ments, I th in k you will see that one of my objections to the F- 18 pro­ gram as we are talking abo ut it tod ay stems from the fact th at this rea lly has no t been done. Mr. Ch air ma n, I would like to develop some o f my arg um ents here and you can pu rsu e it by qu estioning.

ORIGINAL REQUIREMENTS FOR F -1 6 /F -1 8 It is my opinion th at the A ir Force wi th the F- 16 and the Navy with the F- 18 find them selves today in the position of developing ai rc ra ft fo r which neith er had an origi nal requirement. Th is doesn’t mean each service can not use these ai rc ra ft in th eir resp ective force str uctur es for meani ngful missions. Fo rtu na tely the services have great flexibility which enab les them to su rvive ou r collective, bu t sometimes not too wise, politic al wisdom. To illustra te, we have already heard the services supp ort these ai r­ planes du ring testim ony this yea r. Bu t as a matter of intere st, A ir Force stil l has the F- 16 o r the air com bat fighte r Required Op erati on al Cap ab ili ty (R OC ) docume nt under preparati on . It is this document th at sets fo rth the req uir e­ ment for a new ai rc ra ft and it is normally com pleted pr io r to a dev elopment pro gra m. Of course, there are oth er ways to generate a req uirement for a new ai rc ra ft bu t usu ally the req uirem ent is generated by the majo r 8 command havin g need of the system. For exam ple, requirement d ocu­ ments have been prepared for the F-15 , A-10, B -l , AW ACS and the Adv anced Airborn e Com man d Po st because the re was an Air Force generated req uirement for these system s. Ab out the only value the F-16 ROC will have at this late date is fo r historical purposes.

na vy ’s fi ghte r program pl an Th e Nav y story is not too differen t. Th e Navy’s figh ter pro gra m was on trac k un til 1971, when the existing pla n to buy an all -F-14 force was c han ged by then Deputy Secre tary of Defense Packard . He limited the app rov ed buy to 313 F- 14 A’s, which was the number then in the 5-year defe nse plan . How ever, he did not foreclose future procure men t. Then later , financial difficulties resu lted in lim iting the p rocurement rat e to 50 F- 14 ’s pe r year whereas a rat e of up to 96 per ye ar had been planne d. Th is fu rthe r raised the un it cost. In 1973, because the F-14 pro gra m costs were high and because of the previously cited financial difficulties, De puty Secretary Clemen ts proposed a proto type fly-off program between a lower cost version of the F- 14 and a nav al version of the F-15 . How ever, Congress rejected th at as too expensive. In Apr il 1974 Nav y, still tryi ng to pla n its fighte r force, recom­ mended an imp roved F-14 witho ut the Phoen ix system , although it could be installed late r. Th is was rejected by the S ecretary of Defense but Na vy’s pro posal to study VFA X, a multim ission fighter and att ack airc ra ft to replace F-4 ’s an d eve ntually A-7 ’s, was app roved. In Ju ne 1974 Navy issued the pre solicitation notice for VFA X but in Au gu st the Hou se Ap prop ria tio ns Com mittee deleted the VFAX funds, indic ating d evelopmen t and pro curement of ai rc raft by Navy and A ir Force th at are as identic al as possible would result in sub ­ sta ntial savings. At about the same time, the Sen ate App ropriatio ns C ommittee cut the VFAX fund request from $34 million to $20 m illion and directed the Secre tary of Defense to pro vide a repo rt justi fying the need for duplicative development of a lo-mix fighte r airc ra ft by both Air Force and Navy. Next came the approp ria tio ns bill conference rep ort in Sep tem ber 1974 which canceled VFA X and directed th at the $20 million be placed in a new prog ram element tit led “Navy Air Combat Fi gh te r.” It also sta ted t hat fu ture f un din g for the N ACF was to be contingent upon the capability o f the Navy to produce a derivative of the selected Air Force ai r com bat figh ter design.

na vy ’s ch oice for fi ghte r force From this review it is ap pa rent to me th at Navy’s choice for its fighte r force, in orde r of priorit y was: 1. All F-1 4’s—requested by Navy but disapp rov ed by OSD. 2. Impro ved F- 14 but witho ut Phoenix —requested by Nav y but rejected by OSD. 3. VFAX—requested by Navy bu t rejected by Congress. 9

4. Navy air combat fighter, F-18 —n ot requested by Nav y bu t di ­ rected by Congress, but not as now contem plated. Mr. Ch air ma n, on the one hand A ir Force has the F- 16 because of OS D direction and on the other ha nd Navy has the F- 18 because of indir ect congres sional direction. It gives me cause for concern when I see the services havin g to accept systems wdien they did not generate the specific requirement. Nevertheless, I recognize th at A ir Force and Navy have testified in supp ort of these pro gra ms as mee ting their requ irem ents. In fact, Navy has testified th at if the V FA X was completed tod ay, the end result would pro bab ly no t be th at much different fro m the F-18. Perso nally, I question how th at could be because du ring ou r 1973 Tactical Airpow er Subcom mittee hearings, Nav y witnesses ind icated th at deriva tives of either the YF- 16 or YF -17 appeare d to have in­ sufficient capability to be use ful in Navy missions. Yet a little more than 2 years later we ap pe ar to be headed tow ard a mu ltib illion do lla r program with a derivati ve of th e Y F-17 . As I said befo re, I think th is is a case of Navy making the best of a s itu ation it did not want. Mr. Ch airma n, we go t into th is situation because th e F -1 4 and F-15 program s seemed to be g ettin g too expensive. T he idea of a lig htwe ight figh ter, especially one th at w as common to bo th Navy and A ir F orce, was appe ali ng because “li gh tw eigh t” was syno nym ous wi th “ch eap ” or at lea st “less expensive.” It appeare d we could make u p any lack of quality with increased quantity .

F— 16 /F — 18 : LACK OF COMMONALITY How ever, the way the prog ram is now str uctur ed, we have missed on the common air pla ne objectives. We missed because we w ent about it the wrong way. I think the only way th at we could ge t Navy and Air Force to agree on a common fighte r ai rc ra ft is to, figura tively speaking, lock Nav y and A ir Force designers in the same room until they could ag ree on a common co re aircraft. Since ca rrier suita bil ity is the most difficult requirement, Nav y would h ave to have priority. T he A ir Fo rce a irc raft, in a sense, would be a deriv ative of the Nav y des ign ra th er th an the other way aro und as was done with the F -18 . So, Mr. Chairma n, the objective of com mon ality th at Congress wanted between Nav y and A ir Force aircraft is not going to be achieved. Air Forc e and Navy are headed tow ard separa te lig htwe igh t fighte r pro gra ms which we hope will pro vid e us with the force effec­ tiveness required and fo r a lesser cost. How ever, I am not convinced this is the case -with the F-18. We mu st continue to rememb er th at Navy is now pro cee din g with the F- 18 because of congressional guidance, not because of a sta ted Nav y requirement. We must ask o urse lves: Is this rea lly the p rogram Congress wa nts and , more im po rta ntly, is it the ai rc ra ft th at Nav y needs? Are the re othe r alt erna tiv es Navy could take th at will give it an effective fighter an d attack force w ithin reasonable d ollar lim its ? I think these questions mu st be answered be fore we proceed any fu r­ th er with the F- 18 program . 10

PROGRA M COSTS In a c ha rt sub mitted fo r the record to the Senate Subcomm ittee on Federal Sp endin g Practices, Efficiency, and Ope n Government on A ir Com bat Fig ht er Program s, there was a com parison of costs, in con stant fiscal ye ar 1975 d ollars in thou san ds, fo r 400 F- 14 or 400 F-1 8 aircraft, sup ple me nta ry to th e 390 F- 14 p rog ram . T he cost to procure an addition al 400 F-1 4’s is $5,252 billion fo r a un it price of $13.1 million. The cost to pro cure 400 F-1 8’s is $5,431 billion fo r a un it price of $13.6 million . I should po int ou t th at the addit ion al F-1 4’s are A models and Navy has testified th at beyond the 390 it wou ld require the F-14B, so totals would have to be adjusted. Fo r the F- 18 the $1.4 billion d evelopm ent costs are included. Ho w­ ever, wh at interested me abo ut the ch art was th at t he F- 18 does not become a less expensive system un til op erating costs are included. I believe Nav y testified th at the crossover point came at about the seventh to ninth year of operatio n. W ha t I find wrong with these com parisons is th at they are on a 1-for-l basis. That is, it is assum ed th at one F-14 equals one F- 18 and vice versa. Dur ing ou r tactical air po we r hearings on the F-18 I asked Nav y to provide the tota l cost in 1975 dollars to pro cure ad di ­ tional F- 14 ai rc ra ft equivalent in effectiveness to 400 F-1 8’s. Wh en we have this d ata at hand, maybe we will find the F -18 is not the way to go. We also need to exam ine pro cur em ent and life cycle costs of the improve d F- 14 witho ut the P hoeni x capability. Remember t hat Navy requested t hi s version bu t was t urne d down by OSD . These costs need to be com pared to the F-18 an d an equ ivalent effective forc e rat io between these tw o airc ra ft should be d etermined .

AT TA CK VE RSION OF F - 1 8 Th ere is an othe r point th at needs to be made relativ e to the costs of the F- 18 pro gra m. Most of the prog ram costs are pegged again st 800 a ircraf t, a portion of which are pla nned to be the attack version, or the A-18. If t ha t costing is accepted, it means the decision is being made tod ay on the air craft th at w ill replace t he A-7 E force between 1985 and 1990. Assuming a 15-to-20-year air craft life, the A-18 will be arou nd u nti l 2005 or 2010. C an we make t hat kind of decision to day on wh at we know’ about this airc raft? For example, do we know fo r sure th at the A-18 has the gro wth poten tial to be able to surv ive throug h th at time period ? You will recall th at the Source Selection Ev aluatio n Board repo rt questioned the dens ity loadin g of the ai rc ra ft a nd indicated it would be desirable fo r a new T ai rc ra ft to begin with 15 percen t less density. Th e question arise s as to how w’ell both the F- 18 and the A-18 can be growm or modified throug h the yea rs to meet the changin g threat. We sho uld be sure that poten tial is there. It may be th at only the specialized airc raft will be able to su rviv e a nd successfully accomplish its mission dur ing th at time. On the o the r hand, if it is a rgu ed the decision on the attack version of the F -18 can be made much later or is really not being made today, the n any costs, in my opinion, mu st be pegged again st the fighte r ver­ sion 6nly. 11

UNRELIABILITY OF COST ESTIMATES At best, the estimated costs for this program are questionable. If past and present programs are any measure, the F-18 program will not make its estimates. If our concern here is cost—and I believe it is—we must get these F-18 costs nailed down. Otherwise we will find ourselves in the position of buying for the same or more money a system less capable than the F-14 it is to complement. For example, during our Tactical Airpower Subcommittee hear­ ings, I asked, for the record, what allowance has been made for cost growth in the F-18 program cost estimate and was the allowance in keeping with current program experience. Navy replied that provisions for change orders are inherent in the data base used in estimating and were included in computing the F-18 costs. I am not sure I understand that but I am concerned that Navy was unable to provide a dollar figure since that amount must have been computed in order to arrive at total estimated program costs. Cer­ tainly we should know what management reserves have been included in Navy’s estimates. Are we willing to proceed with the program on this basis ? At best, Mr. Chairman, the cost estimates for this program have to be considered pretty soft.

ENGINE DEVELOPMENT As you know, the F-18 is totally dependent on the successful de­ velopment of the F-404 engine, which is a fan version and a derivative of the YJ —101. During our tactical airpower hearings on October 8, I asked, for the record: “What arbitrary increase in performance was assigned to the F-18 as the result of using predicted F-404 engine performance?” The purpose of the equipment was to determine how much better the F-18 would perform with the F-404 over the YJ-101. Admiral Houser replied, in pa rt : There was no arbitra ry performance increase assigned. Engine performance data were derived from the YJ-101 flight test data base developed during the USAF lightweight fighter competition. These data were analyzed by technical experts forming the base line for evaluating the improvements to the engine design and determining performance estimates. It may be a matter of semantics but I think the estimated increase in performance of the F—404 over the YJ-101 at this time has to be somewhat arbitrary . For example, Air Force General Alton Sla,y, commenting on the YJ-101 engine in his statement to the Subcommit­ tee on Federal Spending Practices, Efficiency, and Open Government, on May 20,1975, stated: . . . the thrust of the YF-101 engines in the YF-17 was some 6-7 percent less than forecast for the production J-lO ls af ter a full scale development program. Dr. Malcolm Currie, Director, D.D.R. & E, when testifying to this committee during your lightweight fighter hearings on May 6, 1975, in response to a question by you, Mr. Chairman, about the percentage difference in the J-101 and the F-404, stated : That is the change I am talkin g about, about 6 percent in complexity, 8 percent in cost, and for that you get the increased thrust that Admiral Lee mentionea, about a 17 percent increase in thrust and much better fuel consumption charac­ teristic s . . . 12

Mr. Ch airma n, the F-18 is totally dep endent upo n the successful develop men t of the F ^ 0 4 engine. In clud ing the cost of development engines, the estima ted cost for the F-40 4 is abo ut $300 million and will take well over 4 years, maybe even 5. It seems to me th at the re is enough risk, enough cost, and enough concurrency in the engine program alone to war rant your serious thou gh t as to whethe r to proceed with the F- 18 p rog ram , at leas t as it is now structur ed. A schedule slip in the engine develop men t would be costly but could probably be accom modated. How ever, failu re to achieve the req uir ed engine performance could not be accommodated. You will recall Gen eral Slay indicated there was a 6 to 7 percen t shortfa ll in th ru st o f the YJ-101 engine. Also, recall th at Dr. Cu rrie ind icated a 17-percent increase in th ru st over the pro duction vers ion of th e J-1 01 was required. I may be m aking a n apples and oranges com parison bu t it looks to me like an increase in th ru st of over 20 perce nt is required from the YJ-10 1 to the F^104. It may be th at the F-18 was no t assigned an arbi trary increase in performance using pre dic ted F-40 4 engine pe r­ form ance , bu t if t hat th ru st is not achieved the F-18 will be looking for space in a museum. Ar e we willing to take t ha t ki nd of risk ?

OTHER CONSIDERATIONS Mr. Ch airma n, again du rin g our F- 18 heari ngs I asked, fo r the record, W ha t ai r wing comb ination o f F- 14 and F- 18 squ adrons does Navy consider to be the most cost effective force fo r the fleet ai r defense mission and strike missions. The answer fo r the fleet ai r defense mission was two F- 14 and two F/A -1 8 squadro ns. For the strike mission there was no definitiv e answer as to wh at the mix should be. Fur th er , when I asked if OSD accepted this air win g combination analysis, t he answer was that OSD ha d no t reviewed the N avy ’s studies on a ir win g combinations. Mr. Ch air ma n, it seems str ange th at the De partm ent of Defense should be em barking on an 800 -airc raft prog ram without OSD ha vin g made an ana lysis of how these ai rc ra ft will be used in the N avy force structure. On w hat basis , then , was the program appro ved ?

RECOMMENDATIONS Mr. Ch airma n, I recom mend the F- 18 prog ram not be app roved because other alt ernativ es appear to offer the Navy a more effective fighte r and attack force. I have stressed my concerns over F-18 pr o­ gram costs but it is no t the estimated total amount th at bothe rs me as much as wh at we will get for th at amo unt. I think, for the time being, we will be be tte r sticking with a proven system like the F-14, whose capability and cost, alth ough hig h, is known and in han d, rather tha n pro ceeding with an unknown. Nav y has stressed that, with the F- 18 /A -1 8 in the force, it will have only two fig hter/atta ck ai rc ra ft in its inv entor y—namely, the F-14 and the F- 18 /A -18. Of course, the same would be tr ue with all F-1 4’s and A-7 ’s even when an airc ra ft specialized fo r the attack mission replaces th e A-7. Th ere fore, th e F- 18 program offers no advanta ge in th at reg ard . 13

I recom mend con tinuin g with the F-404 engine development pr o­ gram. I do not believe we sh ould develop new engines only when the y can be m atched again st a pa rti cu lar aircraft. The develop men t of t he F —101 engine should also be contin ued. I recommend a fu rthe r analy sis of the costs of conti nuing with F- 14 ’s be made. The Grum man cost da ta pro vided du rin g ou r Ta c­ tical Airpow er Subcom mittee h earin g was considerably d iffere nt from cost da ta provide d by Navy. As an aside, Mr. Chairma n, we should not allow un it costs and pro gra m costs to be the only mea sure of wh eth er we appro ve o r dis ­ app rov e a pro gra m. Ou r first con sideration must be: Can and how well will the ai rc ra ft do the mission? Cost effectiveness is one mea s­ ure but it should n ot be allowed to override mission effectiveness. Th ere is no po int in losing a b attle with a cost-effective bu t mission-ineffec­ tive system. I recom mend Nav y again examin e the imp roved F- 14 with pr ov i­ sion to add the Phoen ix system . Th is option needs to be com pared to the F-18 , especially as to grow th poten tial over its opera tional life ­ time. Fina lly , Mr. Chairma n, I recom mend Nav y be directed to provide cost com parison s of continuing to rep lace the A -7 force w ith im proved A-7 ’s as req uired versus procuring 400 A- 18’s. This course of action presumes eventual replacement of the imp roved A- 7 by an ai rc ra ft specialized fo r the atta ck mission.

chiles ’ proposal Se nator Chiles was not able to testify before I did , bu t I know approx im ate ly his p osition and I want to make these few point s about it : The Chiles’ proposition will propose a lan d version of the F-18 and ca rrier version of the F-16. Th is would delay pro duction of the F- 16 and services could even tua lly select one o r the other. I think th is pla n is unwise and it is opposed, of course, by the A ir Force. Now, as T sa id before, fo r common-core air plane—and T say “co re” ; th at is th e guts of the a irp lan e—we have to get th e Air Forc e and the Navy designers t og eth er before con struction and not after. Then th at design should be completed industryw ide . W ha t happened here was, in my o pi ni on : The Navy did not follow exa ctly the ins tru ctions of the App ropriatio ns Com mittees of both Houses. Fr an kly, to do so, as T h ave said previously, would have been almost impossible. What the y have done is t o tak e a few lit tle chunks from the F- 17 and tak en the ball of wax over to anoth er airc ra ft man ufacturer not engaged in the origi nal com petition and substitu te an engine th at has not been completed. It is, in effect, a pa pe r engine. I have no doubt th at th e engine can be developed and will be developed, but. it is no t rea dy now. Chairma n M cClellan . McDonnell Douglas was not in the origin al com petition? Senator G oldwater. Not in the org ina l com petition, it wasn’t. We had the F- 16 with General Dy namics; and the F-17 , which was No rth rop . The n in the Navy com pet ition, LTV in com bination with GD proposed the F-16 de riv ative; and McDonnell Douglas with No rth rop proposed the F- 17 derivative.

60-913 0 - 75 - 2 14

NEED FOR COMPETITION Le t me say here, in defense of the Na vy’s position, any airc ra ft manufacturer in this country can make a hig hly acceptable, high- performanc e inter ceptor a irc raft. Bu t in k eep ing w ith the sp irit t hat we have always ope rated under, I th in k it should be achieved by competition. In othe r w ords, i f t he Na vy fou nd no way of accepting a derivative of either the F- 16 or the F-17, the n I th in k Navy should have come to the Congress and made t hat rep ort. Then the Congress, in its wis­ dom, if we have any , could have sa id : “All rig ht, let us st ar t from scratch an d design by com petition a Nav y fighte r.” Now, they could tak e the best of the 16 a nd the best of the 17 and tak e the best of the Navy bac kgrou nd and Marine backgro und and A ir F orc e b ack gro und and come u p with requ isite s on which t he com­ pan ies co uld compete, and t hen the Navy could select. Now, Mr. Chairma n, I th ink you will hear testimo ny from ex pe rt witnesses later who will say th at the F- 14 is the best fighte r plane th at we have, and personally I th ink in a c omp etition a ga inst th e F-16, the Air Force figh ter, if the F- 14 competed, with its maneu verable win g ope ration, I think it could outfig ht the F-15. How ever, I ques­ tion wh eth er it could do it with the win gs in a fixed position. I think the F-14 is the best fighter a ircr af t we have in th e inv ent ory , so why not con tinu e to buy th is airp lan e. Th e Navy has te stified tim e and again th at the y could even use it fo r their inter dic tio n or close air support, if th ey had to. I somewh at question th at, bu t th at is their business, an d the y know more abo ut it th an I do.

F -1 8 LI FE CYCLE COSTS A 400 F -18 pro gra m, life cyclewise, is going to cost about $7 billio n witho ut any pla ns in th at figure for inflation. A 400 F-14 pro gra m, on the same basis, is going to cost about $8 billion. I think when we get all throug h wi th it, the F-18 will cost about as much per un it as the F- 14 ; so we haven’t, in effect, developed a lightw eig ht fighter at a lesser cost. That was really one of the concepts of a lig htwe igh t fighte r—to build a bigger fighte r force at less money. Navy h as stressed t ha t, with the F- 18 /A -1 8— and this is som ething th at may come as a surprise to the Ap prop ria tio ns Comm ittee; we are talking about an F-18 an d the Navy is also talking abo ut an A-18, which is a second airc raft, which would be an attack version of the F-1 8. Th is is, of course, somethin g we di dn ’t contemplate at all in th e lightw eig ht figh ter program. I t hin k, there for e, th at the F- 14 plu s the A-7, un til a lig htwe igh t Navy att ack ai rc ra ft can be developed, should be th e Nav y force. I would con tem plate th at this com bination would extend at least throug h the 1980’s. But the F -14 c ertain ly will be as good an inter cep­ tor ai rc raft as we can build, long-rang e interc eptor ai rc raft and even a short dogfight -type of ai rc ra ft if we have to modify it a bit, un til the 1990’s. Mr. Ch airma n, th at completes my formal statem ent and off-the-cuff remarks . I f you have any questions, I would be h appy to tr y to an swe r them. RECOMM ENDATIO N ON E- 1G PROGRAM Chairman McClellan. What about the F-16 program? Are you satisfied that we should proceed with it ? Senator Goldwater. Oh, yes; I think on the F-16 I am a little dis­ appointed in the cost it has reached; I would have been much happier had it remained down near the $5 million mark that we were talking about. There is no question about its performance. I t probably has the highest rate of climb of any aircraft in the world. The Air Force is very pleased with it. I think it is probably the best small airplane we have ever built. Chairman McClellan. You spoke of the engine in the F-18 as being a paper engine—one th at has not yet been tested. Is that a Pr att & Whitney engine ? Senator Goldwater. No ; it is General Electric.

PRATT & W HIT NEY LETT ER

Chairman M cClellan. I received a letter yesterday from Pr att & Whitney regarding the engine in the F-16. I don’t know tha t it is necessary, but I will insert their letter in the record here, unless there is any objection. I did not know tha t it had been questioned. Senator Goldwater. Well, it has been. [The letter follows:] P ratt & W hit ney A ircraf t D iv isio n , Unit ed T echnol ogies C orp., October 20, 1975. Hon . J oh n M cClellan , Chairman, Committee on Appropriations, U.8. Senate Dirksen Senate Office Building, Washington, D.C. D ear M r. C ha irman : Senator Lawton Chiles' letter to you stating his views on the F-16 and F-18 Air Combat Fighters presents a very inte resting pro­ posal. The desire to structur e a weapon system program with controls to pro­ tect aga inst cost overruns and failure to meet mission requirements is certainly understandable and laudable. We believe, however, that the two competitions leading to the selection of the F-16, first by the USAF, and subsequently by the NATO Consortium countries, have alre ady provided such controls. Fu rth er­ more, th e proposal recommended in the Senator’s letter, if adopted, might easily be viewed by the NATO Consortium countries as a breach of our agreements. Defense preparedness and aerospace industry employment were the major fac­ tors in the NATO choice of the F-16 over the French Mirage F-1 E and the Swedish 37E. The Consortium countries need to begin the process of replacing their aging F-104 fighters now. With serious recession facto rs at hand, their national aero­ space industries’ employment levels have to be maintained. Therefore, any evidence of delay or lack of U.S. Government support of the F-16 program, in our opinion, would reopen the European competition for the Air Combat Fighter. It ■would also have a disastrous effect on the relationships developed thro ugh many months of delicate negotiations with each of the fou r Consortium coun­ tries. I believe the implementation of Senator Chiles’ plan would be regarded by the NATO countries as nullifying our agreements with them. Their logical response would be the choice of the “Mirage’’ aircraft because of attrac tive immediate economic and political advantages to which the French government committed during the competition. The impact of this action on the United States would be the loss of $15 to $20 billion in foreign export sales, over 65,000 jobs, and the opportunity to strengthen NATO. 16

Control desired by Senator Chiles to ensure meeting the airc raft cost and per­ formance requirements is, in our opinion, already a pa rt of the F-16 program as currently planned by the USAF. The Air Force chose the F-16 in a fly-off against the YF-17 on the basis of clearly superior performance and lower cost. The open competion in Europe with the Mirage F-1E and SAAB 37E airplanes resulted in an intense analysis of all the program areas by a select evaluation team on which all four NATO countries were represented. The resu lt was the independent selection of the F-16 by each of the four Consortium countries. In large part, this was based on the airplane and engine combination having convincingly demonstrated its capability in the prototype flight test program. As for our F100 engine in particular, it is not a “paper engine”. It began flying in the F-15 in July 1972 and has been in operational sendee for nearly a year in the F-15s flown by the USAF Tactical Air Command. There are now over 17,000 flight hours on production eng ines; therefore, the performance of the F100 engine is known. Production of the engine for the F-15 air craft during the past year has verified the costs as consistent with our fixed-price contract (negotiated during the competition against the YF-17) for engine deliveries through 1981. Engine performance and maturity are being dem onstrated daily in the F-15 airplane. It is expected to have over 800,000 flight hours of experience by the time the first production F-16s are delivered. In summary, we believe that the controls Senator Chiles is recommending for the F-16 program have already been provided and that any delay in pro­ ceeding with the planned development of the aircraft could easily destroy the NATO Consortium par t of the program. In view of all these facts, I strongly urge that you continue to support the F-16 program as the Air Combat Fighter for the U.S. and for the NATO Air Forces. Very truly yours, E. V. Mar shal l , Vice President and General Manager, Florida Research and Development Center.

EN GI NE RESEARCH AND DEVELOPMENT

Senator G oldwater. I think the country mak es a mistake and the Congress makes a mistake in not emp has izin g m ore con tinuin g R. & D. in engines.W e ar e always a little b it behind in engines. I f we do get th e idea th at we can have a common-core a ircr af t between A ir F orce and Navy, we know th at the Nav y has to hav e an engine of hig her th ru st because th e ai rc ra ft is going to weigh more, and when it weighs more, the existing engine will not give the performance that it needs. Bu t we wait sometimes yea rs for the ai rc ra ft companies to improve the engines because we have never emp hasized , in my opin ion, the need for continuing research a nd develop ment in the a ircraf t engines. Chairma n M cClellan. Sen ator, is the F- 18 designed to fill th at ga p in ai r su pp ort ? Senator G oldwater. The F-18 is supposed to be a ca rry-on —I w on’t pu t it t hat way—it is supposed to be an interc eptor fighter f or close-in inter cepto r work, ai r sup eriori ty maintenance by the Navy to prote ct the fleet. Now, in my opinion, the F- 14 can do t hat , pa rticularly if th e Navy is allowed at this tim e to go ahead with the VFA X pro gram. Th e Congress has n’t allowed the Nav y to do it. I am looking now a t th e time frames, the 1980’s------Senator S ymington . The Congress ha sn’t allowed the Navy to do what? Senator G oldwater. T o proceed w ith th e VFA X. It was pro hib ited by the approp ria tio ns conference rep ort la st year. I am looking forward to the 1980’s, which is the F-18 time frame, and all I am s aying i s : I f we are goin g to have an F-18, let us have an 17

F- 18 th at has been developed by com petition between the companies who want to get into th e competition.

REOPENING OF COMP ETITION

Ch airma n McClellan. Would you fav or opening up the com peti­ tion to all aviation ma nufac tur ers , or lim iting it to the two ori gin al com petitors, No rth rop an d McDonnell Dou glas? Senator Goldwater. I would open it up to any man ufacturer who wants to get in the act or any com binatio n of companies. I t may be th at Lockheed and McDonnell Dou glas might want to go tog ether. Ch airma n McClellan. McDonnell Douglas is a par t of the F- 18 now. Senator G oldwater. Y es; bu t the po int I t ried to make is t hat any ai rc ra ft company alone—the Nav y or the A ir Force or the Ma rines could go to any ai rc ra ft comp any in th is country and tell them wh at the y wanted and th at company could build it. But th at is witho ut competition. I think we should jus t announce th at the Navy has pla ns and let the Navy define those plans carefully and sub mit them for com petition between the companies and the engine companies. Ch airma n M cClellan. That would mean buildi ng a new engine ? Senator G oldwater. Not necessarily; they migh t win d up with the same engine we are talking about, bu t we would be fu rthe r down the road, and the engine would be ready whe n th e a irf rame w ould be rea dy. Ch airma n McClellan. It has been suggested by some th at wTe just reope n com petition between th e or igi nal bidders. Senator G oldwater. I would throw it open, and I think you would wind up essentially w ith the o rigina l people, th at is righ t.

NAVY IN SISTEN CE ON TW O-EN GINE PLA NES

Ch airma n McClellan. The pla ne the Nav y rejected—the F-16 — was a one-engine plane , was it not ? Senator Goldwater. Tha t is righ t. Chairma n McClellan. And the Navy insists, I believe, th at th eir plan es ha ve tw o engines. Se nator G oldwater. Well, any pilot c an un derstand th at. Ch airma n McClellan. I think so. Senator Goldwater. The two engines fo r Navy use is hig hly desir ­ able, although the accident rate, as I recall it, between single-engine com pared to tw o-en gine is not as great a difference as you would thin k. I could un derst and the Navy’s desire fo r two engines and I certainly wouldn’t arg ue that. One engine can get them back to the ship . Ch air man M cClellan. If we reopened th e com petition on th e F-18, would you lim it it to twin-en gine designs, or would you also leave th at open? Se nator Goldwater. No ; I think the Navy—we are ge tti ng now into com petition for one service and not multise rvice. Ch airma n McClellan. Tha t is ri ght; we have alr eady reached th at poin t. Senator Goldwater. The Navy sits down with th ei r experts and comes up with an idea of an air plane th at they would like. Obviously the F- 18 would pro bab ly be substan tia lly wh at the y would ask for, a tw in-eng ine airp lan e, bu t let the m be satisfied completely with wh at 18 the y are g oin g to ask for, and the n tu rn t hat type of airc ra ft over to com petition between the companies. I don’t th ink the delay would in any way affect the Navy's capabil­ ity. The y could still get the ir ai rc ra ft in the 1980 time frame, which is what th ey were ta lking ab out with the F-18. Min d you, now, they also want to make whatever the ai rc ra ft is into an attack version, and we di dn ’t tal k abo ut th at when we were talking abo ut the F —16 and F- 17 competition. In my opin ion, the A-7 will carry the Navy along throug h the 1980’s in good fashion and , if we care to make an attack model out of whatever “ F ” ai rc raft they come up with, th at would be up to us.

F—14 MODIFICATIONS

Ch air ma n McClellan. You spoke earlier of an F-14 modification. Do you think th at would be practicab le and should be considered if the comp etition is reopened ? Senator Goldwater. No; I do n't think so. I think the F- 14 as it is will serve the Navy well, righ t up into the 1990 period. I t was origi nally designed as a lo ng-range inter ceptor with the Pho enix system, and i t is very, very successful. The modifications th at we talked about and the Navy wanted to inv estigate would have made more of a close-in su pp ort figh ter or ai r sup eriori ty figh ter than it is now configured in the 14—A. There are some people who say taking the Pho enix system out would not enhance its dogfight capabil ity but I would have to see th at prov en before I would buy it. In the meantime the y have an airpla ne th at can be used until they get the airpla ne th at the y say that they need. My arg um ent is: They should get the airplane they say they need throug h the com petitive process and not going to one ma nu­ facturer with lit tle bits and pieces to come up with an airplane. Ch air ma n McClellan. I understand, the n, you would fav or pro­ vid ing them with the plane. Se na tor Goldwater. Ev entually, yes. They have to have carrier aircraft. Ch air ma n McClellan. The only issue in your opinion then, is wheth er we should tak e the F- 18 as it is or reopen it to competition. You favo r reo pen ing it to competition.

ADVANCED AIRFRAME

Se nator Goldwater. Yes; I think we come up w ith a better aircraft. Se nator Young. There has been one alter nativ e suggested, Senator, and th at is thi s airfr am e is fu rthe r advanced than the engine. You would hold up the question of the air fra me and go ahe ad with the engine? Se nator Goldwater. Probably the F-18 , because it is not even in the con stru ctio n stag es yet and, by the time it was rea dy to fly, the engine migh t be ready fo r it. But we don’t know now for certain wh eth er the engine will produce the th ru st th at they say it will. I would much ra th er see e ngin es waitin g out the re fo r us to hook ai r­ frames onto. Se nator Y oung. W ha t is the time fram e of the pro totype? 19

Senator Goldwater. It would be in the 1980’s. The Navy can testify more accurately. I would say 1980 at the earliest. Senator Young. That is all I have. Chairman McClellan. Senator Stevens, do you have any ques­ tions? Senator Stevens. No, Mr. Chairman, I don’t think so.

F—18 AS A VFAX

Senator I nouye. Senator Goldwater, in your statement you indi­ cated that Congress rejected the Navy VFAX proposal. But isn’t it true that the F-18 is a VFA X ? Senator Goldwater. No ; not as I see it. Senator I nouye. So your recommendation is that we stop the F-18 program as presently conceived ? Senator Goldwater. That is right. Senator Inouye. And in the meantime continue in the purchase of F-14’s? Senator Goldwater. That is right. Senator I nouye. And reopen the program ? Senator Goldwater. That is exactly my position. And if the Navy needs close air support aircraft, interdiction-type aircraft, the A-7, in my opinion, modified as necessary, will perform wonderfully into the 1980's, when they will have an attack aircraft that will probably be capable of more speed and maybe pass Mach 1, although I wouldn’t say that is too highly desirable: but if we want it we can get it that way. We can get an aircraft by then that will carry possibly more load, but that in itself isn’t too much needed in my opinion. Senator I nouye. S o, as presently conceived, you do not believe that the Nation will be getting its money’s worth out of the F-18 as com­ pared to the F-14 ?

PRICE INCREASES IN F -1 8 PROGRAM

Senator Goldwater. I don’t because of the flight characteristics I have referred to and the price. Mind you, when we talk about a lightweight fighter, we started out talking about $3 million. We are now talking—this F-18—the program costs will be about close to what the F-14 will be. We are talking about a $13 million fighter unless they are bought in extremely large amounts. But we are not developing in the F-18 what I consider to be one of the main advantages—an ability to buy a large number instead of a limited number because of costs. Senator I nouye. Thank you very much. Senator Chiles. I don’t have any questions, Mr. Chairman. Senator Symington. Thank you, Mr. Chairman. I have a letter I would like to read from Sanford McDonnell. It is short, a page and a half, and it refers to many of the matters that have been referred to, which Senator Goldwater brought up, and it also is an answer to some of the points that SenatorChiles has made. I have heard only verbally from Senator Goldwater tha t he op­ posed the F-18 but I received a letter that Senator Chiles sent you and he asked for comments to the letter. I have also talked to various people in the Navy and in the Department of Defense about it. 20 Bu t the l etter is wh at I think would be inter estin g because I think I h ave h ad a little of experience in th e avia tio n field m yself an d I don’t wa nt to tak e issue with the Defense De partm ent, the Sec reta ries and th e service itself, unless I am sure of my facts.

SENATOR CH ILES ’ LETT ER ON F -1 8

Chairma n M cClellan. Before you read the response to Senator Chiles’ le tter, I th ink it only prop er th at we i nsert a copy o f the origi­ nal correspondence. U.S. S enate, Committee on G overnment O perations, Washington, D.C., October 7 , 1915. Hon. J ohn L. M cClellan, Chairman, Committee on Appropriations, Washington, D.C. Dear M r. C hairman : As you may recall, when I testified before the Defense Subcommittee last May you and I went ofF the record to discuss one issue that was particu larly troubling to both of us: the Air Combat Fighters, the F-16 and F-18. Since that time, I have had the chance to review the record of testimony’ taken by the Appropriations Committee and my subcommittee on Federal Spend­ ing Practices has held extensive hearings. I am writing to thank you for the assistance of the Committee and to let you know how I have come to view the situation. It is my conclusion that we must reintroduce dire ct competition to the F-16 and the F-18 programs and hold open the possibility for commonality if we a re to have any hope of meeting the program estim ates for cost and performance. Specifically, I intend to propose that the Appropriations Committee adopt report language to: Earmark .$15 million dollars in the F-16 appropriation to conduct the first year’s work leading to the prototype demonstration of a carrier-based version; and conversely, Earmark $15 million in the F-18 appropriation to conduct the first yea r’s W’ork leading to the prototype demonstration of a land-based version. This language would set these programs into an acquisition pattern recom­ mended by the 2% year study of the congressional Commission on Government Procurement. It would reopen a competitive threat to keep th e cost and perform­ ance of both aircraft in line ; commit us to only a step-by-step approach to keep open our options until we have more than paper promises, and hold open the option for cost savings resulting from common aircraft for Navy and Air Force. Unless such a middle ground step can be taken, I l>elieve we should then re­ consider a moye to delete all funds for the F-18 and to restruc ture the F-16 program to more clearly reserve major productional commitments. Overall, I have become convinced tha t the opportunity for commonality is real but has been artificially foreclosed with pre-emptive decisions and loose arg u­ ments. Further, both these programs, if not opened up to more hardware devel­ opment, will inevitably lead to the same force stru cture disruptions we have seen in past programs similarly based on paper competition. The F-18 and the F-16 programs are being conducted so a s to guarantee, I believe, cost overruns and performance shortfalls. Let me review’ some of the sj>ecific reasons I have reached this conclusion. In the first place, there never w'as a consistent, well thought-through decision on the military need for these tw o new programs. The Air Force prototypes began as—and were never understood to be anything more than—“technology demon­ strators”, completely olT-line from any force structure plans. The Navy was pro­ ceeding slowly with its V FAX studies and its own “technology demonstrator prototype”, the XFV-12A. The General Accounting Office verified th at : “the Air Combat Fig hter’s performance requirements were not derived from the th re at We could not find, even in the Air Force as late as February 1975, a direct relationship between the required capability of the Air Combat Fighter with the thr eat aircraft that was expected. Similarly, with respect to the Navy, 21 the program was not well-defined with regard to program cost estimates, per­ formance requirements and schedule milestones”. Never were the mission needs analyzed to see whether or not they were suf­ ficiently similar so as to justify a new program—star ted from scratch —to give us savings through commonality. Instead, the Air Force Lightweight Fighter prototype “demonstration” was compressed into a full-blown program competition. The a irc raft flown at Edwards AFB were only engine airframe tes t beds. Cost and performance estim ates were all based on paper proposals extrapolated from data collected during the proto­ type tests : new engines; new we igh ts; new designs; new avionics; all on paper and all with a $15 billion market hanging in the balance for the two contractors. This is a return to the old procurem ent pattern despite the now-accepted policy wisdom of a new dedication to “fly-before-buy”. Yet we have the F-16 and F-18 programs with incredible overlaps in development and production. To quote Dr. Currie, “Long lead Production Release for the F-16 is planned for Jun e 1977, prior to testing in an operational environment”. “F-18 pilot production release would occur before testing. Long Lead Lot II I Production Release—1st qua rter, 1978. Initial Sea Trials—August 1979. In 2 years, we will actually know what the F-16 will do and cost. If ex­ perience means anything, it will do considerably less and cost considerably more. The Navy case is even worse. After the Congress had directed the Navy to select a version of the Air Force airplane, the manufacturers proposed what the De­ fense Department says they considered brand new air craft designs. Both were judged “unsuitable” as of January 1975. By May, one proposal had been mas­ saged to the point where it became “marginally acceptable”. As one DOD wit­ ness explained, it was all a ma tter of “judgment”. I am generally inclined to better tru st the military judgment on technical matters. But not when the Air Force and Navy judgments contradict each other left and right. The Navy rejected the F-16 as “car rie r unsu itable” in pa rt because the elec­ tronic control system was judged an unnecessary hazard. It was an advantage as fa r as the Air Force was concerned. While a serious deficiency in the F-18 armament stored on top of folded wing tips—a first in carrier deck operations— was deemed only “less tha n desirable” in carrier suitability judgments. The Air Force saw the need to reca lculate the performance claims for the General Electric engine only to have the Navy fully accept the con trac tor’s claims for a still more advanced proposed engine model. The Navy ruled the F-16’s 7.8 degree tail clearance was unacceptable—only to ad mit the F-14’s is about half that today, 4.4 degrees. Cost estimates shifted dram atically in the six weeks between our two hearings : Life cycle cost jumped $3 billion for the F-18, $1.6 billion for the F-16. F-18 engine development cost estimates went up from $276 million to $347 million. DOD witnesses denied knowledge of and discounted new estimates given to the committee over th eir own signatures. All these arguments and more, including retractions and reversals by DOD witnesses, are documented in the record of hearings I have enclosed with this letter. To step back from this record of confusion, there is one simple fac t of the matter: neither Congressional Committees nor the military have any hardware data to sub stantiate estim ates of cost and performance. For all the rhetoric on the need to test before making major commitments, we’ve again taken the easy way. The remaining development and production for each aircraft are severely overlapped so that both aircraft will be rolling o ff the lines before operation al testing has barely begun. To proceed as planned also means we will permanently close the door to pos­ sible co3t savings through commonality. The Defense Departm ent has already conceded th at the costs of F-16 and F-18 will not be “about the same” as a com­ mon a irc raft (their original testimony) but will cost “about $700 million more.” The gap will grow to the billions as these programs each grow in c ost Based on your own investigations, you know that we cannot arb itrarily im­ pose commonality; the TFX experience illustrates that conclusion. But equally valid is the experience of the F—4 and A-7 where appropriate adju stm ent of the requirements led to direct savings. Mr. Chairman, I am proposing that we buy some essential and inexpensive insurance against a $27 billion program effort. This insurance would, 22

Introduce a real Competitive threat to the selected a irc raft and provide incen­ tives to keep costs dow n; and Provide for cost savings through commonality should additional competition demonstrate th at a common a irc raft can meet the mission requirements of both services. According to the Director of Defense, Research and Engineering, it would cost only $15 million in basic design effort and wind tunnel testing to design an F-16 version th at could qualify for the Navy. Then, to prototype on an austere basis would take another 2 years and $50 to $80 million. Equivalent amounts should finance austere development of a land-based version of the F -18 as its develop­ ment proceeds. I have received assurances from the concerned contracto rs that (1) they would, in fact, be able to execute such activity for this amount, and (2) they would en thusiastically support such a challenge if both programs are to proceed anyway. The cost of austere prototyping competition, then, could be expected to total something under $200 million over t he three years. We could stop at any point that either aircraft, program began to falter. We could concentrate on either one at any time. We could chose to continue into a more extensive demonstration. And in the end, we will have some firm conclusions on costs, performance and commonality for less than 1% of the total life cycle costs which are at stake. The savings could easily be in the billions. The Defense Departm ent’s only public objection is tha t this proposal will cost more money now which, they fear, will come out of o ther programs. They believe competition and hardware development has been carried fa r enough. I stre nu­ ously disagree. Time and again, we pay more later by cutting corners at the beginning. When will we learn. The only other common argum ent opposing this proposal seems to be the notion that we can never replace the F-16 in the European Consortium sa le s; that we a re irrevocably committed. This, I believe, is nonsense. Why Should we expect the Europeans to t ake delivery on 348 a irc raft if they turn out not to perform as promised? Why should we expect the U.S. to de­ liver such aircraft when U.S. companies have guaranteed a price, which, if exceeded by just 26% would match the net worth of General Dynamics? (Typical cost growth experience has been 30% according to RAND statistics). Why should we foreclose still larger foreign sales markets by not developing a twin-engine alternativ e for other European and non-European nations who may have a p refer­ ence for such an airc raft? The European Consortium commitment is no deterrent, as far as I can tell. The manufac turers, it would seem, should welcome the opportunity to prove themselves. Those members of Congress who find themselves pressed for one rea­ son or another to make hard-over technical source selection judgments one way or the other Should welcome the opportunity to let the airplanes and the tests settle the arguments over costs and performance, including comparison with the F-14 and F-15. Mr. Chairman, I w rould be pleased to discuss this proposal with you at length. I have also enclosed some dra ft language I intend to propose. In the meantime, should the committee staff have any furth er questions, please contact Mr. Les Fettig, Subcommittee Chief Counsel, ext. 40211. With best personal regards. Sincerely, Lawton C h il es . Enclosure. Additional L anguage fob C om mittee R eport In the Committee Report Section fo r:

R ese arch , D evelopment , T est and E valuation —N avy

NAV Y AIR COMBAT FIGHTER Add the following lang uag e: “The Committee directs, however, tha t $12,000,000 and $3,000,000, respectively, of these amounts shall be used only to conduct the initial design and test ac­ tivities required to develop a land-based version of the aircraft which can be demonstrated in prototype tests by calen dar year 1078”. In the Committee Report Section for: 23

R ese arch, D evelopmen t , T est and E valuation —A ir F orce

AIR COMBAT FIG HTER Add the following language : “The Committee directs, however, t ha t $12,000,000 and $3,000,000, respectively, of these amounts shall be used only to conduct the initial design and test ac­ tivities required to develop a carrier-based version of the aircraft which can be demonstrated in prototype tests by calendar year 1978”.

M ’DONN EL L DOUGLAS LETTER

Senator S ymington. The letter that I would read is: I have your note of 10 October attachin g the lette r of Senator Chiles to Chairman McClellan on his proposed language for the FY 1976 Appropriations Committee Report on the Navy and Air Force Air Combat Fighter. He proposes to provide prototype demonstrations of a carrier-based version of the F-16 and a land-based version of the F-1 8; and should this not be adopted, he proposes to delete all funds for the F-18 program and restructure the F-16. Senator Chiles’ stated objectives are: (a) more competition, (b) more fly- before-buy, and (c) commonality between USN and USAF programs. Taking these one at a time, of course it is desirable to maintain competition. But there is already an abundance of vigorous competition as the OSD programs are now constituted. In the U.S. Air Force, the price-effectiveness competition afforded by the F-16 versus the F-15 is real and active; and later the F-18 could be introduced into USAF at the expense of the numbers of F-16s and/or F-15s should these later programs falter in the competitive atmosphere. This is precisely how the USN F-4 was procured by the Air Force in lieu of additional USAF F-105s when the latte r program encountered technical difficulties. And a casual reading of the current testimony and debate on the F-18 versus the F-14 and A-7 shows there is plenty of genuine competition alive today and for many years to come to assure maximum economy and performance achievements by the suppliers of the F-14, F-18 and A-7. Both the F-14 and A-7 are com­ mitted to production through 1979, hence unquestioned open competition exists within the USN for the next four years. In addition, four programs, namely the F-14, F-15, F-16 and F-18, will compete vigorously to fulfill the fighter needs of our allies in the years ahead. Senator Chiles’ alternative proposal, deleting F-18 funds should his proposed language not be adopted, obviously seriously reduces competition—actually eliminates all competition with the F-16 for the low portion of the high-low mix. The Senator’s second goal of more “fly-before-buy” is laudable in general. But as to specifics, the F-18 program as proposed by OSD provides more fly- before-buy tha n any jet fighter program of the las t two decades. Using the successful F-15 program for reference, there was no competitive prototype air craft but technical confidence was achieved by technology prototypes for the engine and the radar, followed by a technical demonstration milestone management that coupled decisions to proceed with meaningful increments of technical achievement. The F-18 is patterned in the same manner with two additional major fe atur es : (a) There were competitive prototype airp lane s to provide solid aerodynamic, propulsion, flying qualities, and cost data before the start of full-scale develop­ ment. (b) A more conservative F-18 full-scale development and production build-up delivers the 100th airp lane 91 months after go-ahead versus 78 months for the F “15—over a yea r lat er with the added benefit of two prototype airplanes. Finally, on the subject of commonality, its purpose is to reduce cost. As Dr. Currie testified, the decision by the Air Force in favor of the F-16 prior to the U.S. Navy decision was approved by OSD because it would be more economical to procure F-16s for USAF and F-18s for USN than F-18s for both services due to the basically smaller and more economical design of the F-16. In this case, commonality was not meritorious unless achieved by the F-16 for both services The outcome of the USN evaluation of the F-16 carrier versions showed jery little commonality with the Air Force versions besides not meeting the basic requirements of the Navy mission. This resu lt is hardly surprising Both of the successful common USN/USAF programs in the recent past, the F-4 24 and A-7, originated with the USN for the simple reason that the USN re­ quirements are tou gher; and, once satisfied by a design, that design can be introduced into Air Force inventory with relatively little change if the lower fighter performance and higher costs flowing from the Navy requirements are competitive with other alte rnatives and, most important, if the performance is superior to the thre at. The one major effort at a joint USAF/USN program, the F -ll l, resulted in a USN design (F-111B) that diverged from the USAF design and th at was, in the final analysis, unacceptable in the USN role. In summary, Senator Chiles’ objectives of fly-before-buy and competition are being achieved by the OSD proposed pro grams; and, in fact, deleting F-18 funds would drastically lessen competition. In addition, the cost benefits of commonality between USAF and USN programs are illusory and not achievable in the current situation, so that we heartily recommend implementation of the F-18 program as proposed by the Navy and OSD and approved by the full House of Representatives.

ANA LYSIS OF SENATOR CH ILES ’ LETTER Now, Mr. Chairman, I would ask unanimous consent th at a de­ tailed ana lysis of the lette r from Senator Chiles be inserte d in the record. [The analysis follow s:]

Ana ly sis of S enator L. Ciiil es L etter to C ha irma n M cClellan , D ated October 7, 1975 Page 2, Paragraph 1— The “competitive threat” already exists by virtue of having an F-16 and an F-18; also by having an F-14 and F-15. Secretary Currie has stated to the McClellan Defense Appropriations Subcommittee on May 6: “Mr. Chairman, there are two other very significant points to be made in the development of the F-16 and F-18. One is the importance of having options in future defense planning. One great benefit of the high-low mix approach is that having both types of air craft in production simultaneously provides us the opportunity to increase or decrease the production of either in proportion to changes in the emerging threat. Second, we have found that there is nothing so effective in holding cost down as the existence of on-going competition between manufacturers. Development of the F-16 and F-18 provides a stimulus to keep costs down on the F-14 and F-15, while the existence of the F-14 and F-15 assures tha t the costs of the F-16 and F-18 cannot increase very much. Moveover, both the F-16 and F-18 in some measure compete with one another—while also providing two important options for additional foreign sales. To be able to achieve this level of comi>etition in our fighter aircra ft is a situation we have not had for over twenty years—and is now available with virtu ally no increase in the overall cost of ownership. This is an opportunity for the American business trad ition to work by itself—I feel the pay-off will be substantial.” As to the F-16 and F-18 having been a “paper competition” it is a fact tha t both of these air craft have proceeded to the point of full scale development from a real hard data base—each air craft flew over 300 flights—each air cra ft was flown aga inst other aircra ft. They were both evaluated by Air Force and Navy pilots. Page 2, Paragraph 5— It is difficult to understand how one can say that “there never was a well thought-through decision on the military need for these two new programs.” Congress and DOD have been discussing the necessity for a high low mix for fighters for several years and Congress has been directing the services to work in this direction. The Navy convened Fighter Study Group IV to determine the need for a lightweight fighter to complement the F-14, and replace the F-4 and A-7 aircra ft. This Fighter Study Group, like its predecessors that bad been convened for consideration of major weapon systems, such as the F-14 and A-7, evaluated the threat, Navy roles and missions and surveyed fleet operators to determine the operational requirements that would determine the characteristics of the new’ VFAX airplane. These requirements were satisfied by the F-18 design, by painstaking competent and technical NavAir evaluation, sunnorted by the GAO investigation. Page 3, Paragraph s 3 and 4— 25

In regard to overlaps in development and production quoted on the F-18 program : The pacing of the F-18 program is slower than the F-16 and slower than the F-15. The pilot release refe rred to is only for six aircra ft, hardly a commitment for significant production rates. Delivery of the first engine for these pilot production air craft does not occur until the middle of 1980, by which time the engine will have accumulated approximately 25,000 test hours— including 10,000 flight test hours. The following table portrays the Development/Production overlap risks in­ volved in the programs in question compared to actual F-15 experienced and planned acquisition schedules.

Months from go-ahead to Months to build Months from delivery of to 9 mo from go-ahead to 100th production 1st production 1st flig ht aircraft delivery

F-15...... 31 >78 * 3 18 F-16...... 3 24 65 13 F-18...... 33 91 41

> Will be actual in August 1976. 3 Will be actual in May 1976. 3 Scheduled December 1976.

Page 4. General— Senator Chiles has presented several examples where he feels th at the Air Force and Navy judgements contrad ict each other. Comments that follow clarify the examples he presents. However, it should be realized that the several examples rela ting to the rejection of the F-16 by the Navy evaluators represents even less tha n the tip of the iceberg. Hundreds of Navy evaluators spent months evaluatin g many hundreds of technical details. It is not surp rising that differ­ ent judgements would be rendered by the two services when it is realized that the requirements for car rier operability are fa r more stringent than those for land operation. Not only were these data judged by the Navy during their evaluation, the GAO oversaw the ir evalu ation and additionally in the course of exchange of correspondence relative to the LTV protest, the Navy provided the GAO with great detail rela tive to the evaluation and invited the GAO to review the many files of relevant data. Page 4, Paragraph 1— As stated by the Navy and reiterate d by the GAO in their rejection of the LTV pr otes t: “Rejection of the three LTV designs was based on unsa tisfactory ratings in the performance area, partic ularly combat performance, and overall car rier sui tability”. Senator Chiles’ letter suggests that the electronic control system used in the F-16 was judged by the Air Force to be an advantage, whereas the Navy had judged it an unnecessary hazard. The Air Force F-16 ACF does not incorporate the same electronic control system modifications that were proposed in the LTV designs for the Navy Air Combat Fighter. The Navy evaluations considered the LTV modification to the F-16 electronic control system as a jury rig to overcome an unsatisfactory cha racteristic which, if incorporated, would create an unacceptable hazard. Page 4, Paragraph 2— The Navy has testified that engine experts from the Aeronautical Systems Division of the Air Force Systems Command, Naval Air Systems Command, Navy’s Propulsion Laboratory in Trenton, N.J., and the Department of Defense have all v alidated the performance of the F —104 engine. Page 4. Paragraph 3— The Navy’s response to the GAO relative to the LTV protest states tha t the F-14 has an unacceptable rat e of structural damage at landing due to tail down landing attitude angles. Based upon the experience of this and other ai r­ craft, the Navy established an angle necessary to achieve acceptable tail clear­ ance. The F—16 NACF var ian ts failed to achieve acceptable clearance. The F-18 satisfied this criteria. Page 4, Paragraph 4— Since the award of the sustaining engineering contract to MDC there have been numerous cost estimates in the news media suggesting one alte rnative or another was less expensive than the F—18 and in some cases were inserted into 26

the Congressional Record. Probably the most controversial one pertaining to cost was one alleged to have been an OMB paper. This was one of several OMB dra fts of a working paper, prepared for review with OSD for the FY 77 budget preparation cycle. Following coordination of the final working i>aper between OSD and OMB, the OSD ratified the decision to continue with the F-18. We do not believe that the Navy’s cost estim ates for the F-18, including the engine, have changed in any significant degree since the initial awa rd and was reported to your committee on the LWF hearings of 6 May. Page 5, Paragraph 4— Neither MDC nor GE assured Senator Chiles or his committee that they would be able to execute such activity for the amount noted nor that they would enthusiastically support such a program. Page 6, Paragraph 3— Foreign sales of the F-18 are not foreclosed by continuing with the DoD’s recommended plan. Dr. Currie has stated tha t the F-18 has foreign sales potential. AIRFRAME WE IGH T

Senator S ymington . Th en I would ask a question of Se na tor Gold- water. The Secre tary of Defense talked to me about this plane and I asked abo ut the weights. Se nator Goldw ater knows a lot abo ut ai r­ planes and I know a l ittle myself, especially about th eir purchase and the pric es an d th e problems of air fra me w eight. It is my understandin g, accord ing to the Secretary of Defense, th at the weight of the F-14 is about 62,000 po unds, cou nting the Pho enix missile, and th at the weight of the F- 18 is aro und 33,000 pou nds as again st 62,000, counting the Sparro w and Sidew inder. I would be interested—I have not, for some reason, been able to get the costs on these planes. I t was difficult last year; Ad mi ral Ho u­ ser has tried ha rd to clear me up on it af te r the first he aring we had in the T actical Air Subcom mittee; bu t it seems to me incredible th at people would imply th at the re is not much difference in cost when the re is a difference between 33,000 pou nds for the F- 18 with mis­ siles as again st 62,000 pou nds fo r the F- 14 with missiles. I would ask the able Senator from Arizona, who is knowledgeable on ai rc raft matters but who, I know , also realizes th at the gentle­ man who wrote thi s let ter is know ledgeable—I would ask him to comment on th e points brou ght u p, which are, in effect, the same points th at he brought up in his talk. Se nator G oldwater. The combat weight of the F-18 is ap prox i­ mately 29,000 pounds. Senator S ymington . Be fore p ut ting the Sparr ow s and Sid ewinders on. Senator G oldwater. Th e total take-off weight is 33,000 pounds. Senator S ymington . That is what I said. Senator G oldwater. The F -14 to tal take-off weight is 58,200 pounds. Senator S ymington . I th ink you will find that it is hig her, accordin g to th e Secretary of Defense if you ad d the Phoen ix missile. Senator G oldwater. Tha t is with inter nal fuel, two Sp arrows and two Sidewinders. T ha t is on the F -14 .

F—14/ f—1g/ f—18 COST COMPARISONS Now I wish I could give the Se nator an answer to the cost prob­ lem. He requests that when we sta rte d this whole talk abo ut lig ht ­ weight fighters we were talking of b eing assured by all of the ma nu ­ fac turers com peting th at we were talking abo ut an ai rc ra ft in the 2Z neig hbo rhood of $3 million to $4 million. T he F -16 —I will supply for the record the late st cost on the F-16, bu t it is aw ay above the o rigina l figure. Th e same is true with the F-14, although the F- 14 in the last 2 or 3 yea rs has been main tai ning a pretty good constan t cost. The F-18 , and it is a m atter of record, the $7 billion I tal ked about w ithout any inflation fac tor c ompared to the $8 billion of the F- 14 total cost, with the inflation fac tor. So I think we are talking abo ut som ething th at is—I now have the figure fo r the F-16 , it is $6.3 m illion a copy. Tha t is twice wh at we were talk ing about when we starte d. Se nator S ymington . I ne ver hea rd o f a $3 million fighter. Se nator G oldwater. We tal ked about them in the Tactical Air Com mittee. airframe weights as a cost basis

Senator S ymington . We ll the po int I would like t o make, does the Se nator th ink there can be a ny c omparison between the cost of 33,000 pou nds of a irf rame weigh t p lus missiles a nd th e cost of 62,000 pounds if you a dd the P hoe nix o r 58,000 pounds if you only add the Sparr ow and Sidewinder for the F-14. We are g ettin g down to the cost effect­ iveness in this and I haven’t been able to get all of the figures, and I have tried ha rd to do it. Bu t w hen you have an airplan e th at is almost ha lf o f the weight o f anoth er, to say th at th e costs are com parable , to me is just incredible. Senator G oldwater. I t is a matter of reco rd, Senator. I would like to know myself why this is so. I can tell you one of the reasons th at we got into this. I think Senator Chiles can probably testify on these costs bette r th an I. Hi s figures show tha t the F-14 is an $8 billion program , and the F -18 is a $7.2 billion program. We have the problem of black boxes, and we have the prob lem of the expensive Phoenix system . These are all fac tors th at are different tha n when the Se nator was in the ai rc ra ft man ufacturin g business or component business. It is different th an when I first sta rte d to fly. Weig ht had a lot t o do with it b ut to day it depends on the sop histica­ tion you w ant to put in. Senator S ymington . Senator, would n’t you say the sop histication of th e F -1 4 a re more complex ? Se nator G oldwater. I am mer ely g iving th e figures compiled by th e record. I would like to say th at I would disagree with them bu t with the experience we have had in ai rc ra ft pro curement over the las t 20 years, I can’t say th at I am going to disagree with these figures.

F -1 8 PERFORMANCE EXPECTATIONS

Senator S ymington . Let me ask the Senator anoth er question. He was at the heari ng, and I had to Ch air the hearing, and Senator Cannon had to be on the floor, bu t t hen I had to go to ano the r hearin g. I didn ’t he ar M r. Spa nge nberg. He said “the F- 18 has no more ca pa ­ bility than the F-4 .” Wo uld the Se na tor agree with th at? Senator G oldwater. Well, of course, nobody is flying the F-18. Senator S ymington . The y convinced me the y could make t he engine and the y have made it, and I think the Senator will agree the F- 15 , even tho ugh it does cost more is t he finest fighter in the wo rld today. 28

Senator G oldwater. I won’t buy th at las t statem ent. I think the F- 14 with cer tain con figu rations will outpe rfo rm the F-15, bu t th at is beside the point. Senator S ymington . With the current engine ? Senator G oldwater. Tha t is the ai rc ra ft and the engines th at they now have. Senator S ymington . Mr. Chairma n, I have no fu rthe r questions. I will let the re cord sp eak fo r itself. Senator G oldwater. I would like to answ er t he S enato r’s statem ent abo ut the F- 4. Nobody can say, bu t I would certainly t hi nk t hat the F- 18 could outperf orm the F-4 E. In fa ct we would be doing wrong if we trie d to b uild an ai rc ra ft t ha t wouldn’t outperf orm the F -4. Chairma n M cClellan. Senator Hruska, do you h ave any questions? Senator H ruska. Not at th is time. Senator S tevens. Could I ask one question. You are actua lly sup­ po rti ng the fu nds f or the F-16, is th at correct ? Senator G oldwater. O h, yes. The F- 16 is a production aircraft, or soon will be. W e are not a rguing wh ether we are going to bu y i t o r not. I t is in procurement stages. I am not argu ing again st the concept o f the F-18. I am ju st a rguing th at i t should be done in a different way, and I think th e N avy will get a better fighter. Senator S ymington . I may add one more po int and the n I am thr ough. The Secretary of Defense told me th at th e cost on an equal basis of th e F- 18 was aro und 55 to 60 perc ent o f t he cost o f the F -14, and the Navy wants the F-18. I think I ha d more to do with pu ttin g the F-4 in th e Air Forc e tha n any single pe rson, and I ran into direct conflict with the present Ch ief of Staff of the A ir Force, because to me it was clearly a superio r air pla ne t o its com pet itor, the F-1 5. My intere st in this is the cost effectiveness aspect o f a plane th at I th in k will end up by cos ting a gr ea t deal less, and fo r some reason we can’t get the figures on it. Th an k you, Mr. C hairm an.

CONCEPT OF COST EFFECTIVENESS

Se nator G oldwater. I do n’t agree completely wi th the concept of cost effectiveness. I th ink th at was th e most devastating thing th at Mr. MacNamara le ft us sa ddled with. T here is no way you can argu e abou t it. Senator S ymington . It was not cost effectiveness th at got MacNa­ mara in trou ble. It was commonality. Tha t is one of the th ings th at is being prop osed in this situatio n—com monality. Th e requirements of the A ir Forc e are different t ha n the requirements of the Navy and the requirements of the Navy are differen t th an the requirements of the Air Force, and when MacNamara bo ught it from Harold Bro wn th at you could make one air plan e to do every thing, he cost the Americ an tax pa ye r probab ly more money than anybod y has done at any time. Senator G oldwater. The Senator was o ut of the room when I made the same statem ent. T here is no way you can tak e an a ircr af t out of A ir Force inventory and say it is going to be a com monality fighter. You can star t, tho ugh, and develop a common core which is some thing we have nev er done. Ch airma n M cClellan. We have a rollcall vote in th e Senate C ham­ ber, so we will take a short recess. [V oti ng recess ta ken .] 29

STATEMENT OF HON. LAWTON CHIL ES, JR ., U.S. SENATOR FROM FLORIDA

Ch airma n M cClellan. We will proceed. Senator Chiles, I believe you are ou r next witness. Do you have a pre pared sta tem ent you want to rea d ? Senator C hiles . I want to tr y to go throug h it if I can. I wa nt t o first extend my thanks again for the o pp ortunity to appe ar before the subcommittee. D uring th e 5 months since my la st testim ony , I have had a chance to d evelop some specific conclusions on the ai r combat fighter pro gra ms throug h a review of th is com mittee’s work and hearings before the Sen ate Tactical Airpow er Subcom mittee and my Govern­ ment Op era tio ns’ Subcommittee on Fe de ral Spendin g Pra ctic es. As you know from my let ter of O cto ber 7 ,1 would like to propose a ' mid dle-ground option for th e com mittee’s consideration. My proposal is t hat we continue the F-16 and F- 18 pro gra ms , as requested, but at the same time, cond uct a demo nstration o f a carrier-based F -16 proto­ typ e and a land-based F-18 proto type over th e next 2 or 3 ye ars. Wha t I am pro posing is th at we be skeptic al and hold open our option s until we see some hard evidence on wh at these new pro gra ms will offer us in terms of cost and performance . Tf the F- 16 and F-18 develop as prom ised, we have lost nothing. If they do not, we will create some attra ctive options while we learn enough to settle the con­ flicting a rgu me nts over the F-14, F-15 , F- 16 , and F-18. I believe th is route is b etter than any o f the o ther op tions being p ut forward f or killing, su bstituti ng, or star ting new airp lan es—no t neces­ sar ily because one of them may n ot tu rn out to be b est but because we can not know 7 which is best today . I would like to spend a few 7 m inutes to rev iew how I see th ree a re as : (1) The backg rou nd on these pro gra ms —how we got where we are toda y; (2) othe r p rop osa ls fo r changing these p rogram s; and (3) my proposal for continued cross-over comp etition.

BACKGROUND Let me first say I am no airc ra ft expert. My concerns stem from my resp onsibilities in procurement reform . S in cel replace d Se na tor Ja ck - son as a mem ber of the Congressional Commission on G ove rnm ent Pro ­ curement in 1971, I have tr ied to le arn a few basic lessons about w hat has been righ t and what has been w rron g with our w eapons acq uisition process. Since 1973, the Federal Sp endin g P rac tices Subcommittee has been working to put the Commission’s ref orm package int o effect. Based on hearings this summ er, the Office of Managem ent and Bu dget has agreed to do so throug h a new 7 OM B p olicy circular due to be issued in December. I don’t wa nt to spend a grea t deal of tim e reviewing how we reached thi s situation today . Some pertinent details a re s pelled out in m y Octo ­ ber 7 lette r and this comm ittee has ta ken an excellent record of tes ti­ mony. In summ ary, let me ju st say th at , up un til th is point, these p rogram s have not matched the recommended acqu isition p attern of the Pro cu re­ ment Commission. Fron t-e nd mission decisions were badly s cattered. The p rog ram s grew* from the bottom up.

60-913 0 - 75 - 3 30

Congress again interv ene d where it should no t have because there were no better early o pportunitie s. The p rog ram wras rushed by an ex tra year to s atisfy th e Europ ean s. Development will be badly overlapp ed w ith production , leavin g only skim py test an d evaluation. All th ese chara cte ristics point to tro uble, in the Commission’s view. If you look at t hi s pa st history, it was when we ha d these problems, overruns would result. My pro posal wou ld tr y to ease th ese pr ogram s back into a more solid pro curement pa tte rn, if no thing else.

OPTION i : DO NOTHING, CONTINUE BOTH Th is poor acquisition pa tte rn is ma inly why I would arg ue again st the firs t option open to the comm itte e; nam ely, do no th in g: Le t b oth the F-16 and F- 18 proceed untouch ed. Th is kind o f pro gra m is why I would arg ue a gains t the first option because that would be allo win g the m both t o proce ed unto uched. W e ca n r ead all of the letter s th at we wa nt to, and I can tell you of course all of th e companies involved wa nt th at , because they have all got th ei r pieces of the action now and they have all got thei r plane, and t hat is e xactly wh at t hey want. I think th at is rea lly wh at the Air Force wan ts, and wh at th e Nav y wants. T hey have th eir planes now. I th in k we have learned enough fro m experience not to pu t any great fa ith in the performance a nd cost p rom ises f or prog ram s at th is stage of early developmen t. I t ’s nobody’s fau lt, b ut we simply are not sm art enough to pr ed ict these t hing s before tho roug h tes t an d evalu ­ ation. An d the pa rticul ar cost confusion on the se pro gra ms seems to con­ firm th at sk epticism .

UNRELIABILITY OF COST ESTIMATES W ith overr un af te r ove rrun, we should recall th at back in 1970, everyone finally said , “We sho uld hav e known be tte r than to believe those estimates. Le t’s from now on run indepe ndent estimates to check ourselves.” Now, in 1975, you have to d ra g ou t those ind ependent estimates o nly to have them denied and excused away by senior DO D officials. First, life cycle cost estim ate s: j? _ P 3 • Billions Advertised ______$8.7 OSD Independent______9. 8 F-1 8: Advertised ______13.7 OSD Independent______16.9 In public hea rings, we were told the differences were pu rely a matter of overhea d acc ounting and op erating periods, ha vin g no thi ng to do with the cost of the air craft. In answ ers fo r the record, however, we were then told for th e F-18 th at differences between the two figures res ult fro m OS D’s hig her acquisition cost estimates. Wh en we then asked for a specific app les-to-apple s com parison to clear u p th e confusion , we were to ld : We would pre fer not to provide a detailed breakdown. Since we believed the deta ils of the $16.9 billion calculation may no longer reflect the DSD view of the costs of the F-18 program—and since th at program itself may be revised 31 as a result of the DSARC review—we will defer presentation of further detailed information. I am not surprised at this reluctance because, as I have stated, we have had only a limited paper competition. There is still no F-18 and the cost and performance figures are as soft as the lead in a pencil. Admiral Houser confirmed this before the Armed Services Subcom­ mittee 2 weeks ago when he testified on what has been happening for the last 2 months and why the DSARC review has been repeatedly delayed. He said, “We have conducted approximately 150 trade studies and decided what kind of airplane we would like to propose to the DSARC.” ENGINE DEVELOPMENT COSTS As for the engine, our subcommittee received three different esti­ mates of development costs: Millions Advertised ______$301 Navy Independent______325 OSD Independent______347 We were told in May that this F-404 engine would have 17 percent more thrus t than the predicted thrust of the J-101. Now, the Navy has testified it will have between 8 and 15 percent more thrust depending on the conditions. In the meantime, I understand the Air Force has taken a separate look at the proposed engine and doesn’t agree with the Navy that they should accept all the claims at face value. Mr. Chairman, I know virtually nothing about engine or aeronau­ tical science, but I think I do know when people are making guesses. Most of our recent major weapons programs have been built of guesses. That is the essence of the argument I would make against the option of simply letting these programs go on as planned. It is also a key argument, I believe, in favor of my proposal to hold open options. Let’s take the F-14 as an example. Look at what we were told we were getting and look what we got.

F - l 4 : PREDICTIONS AND FINAL RESULTS Compared to the original Navy requirements the contractors guar­ anteed to meet, the F-14 actually: Came in nearly 5,000 pounds overweight. Missed its predicted 9.5° tail clearance angle, wound up at only 4.4°, which meant its carrier approach has to be changed to prevent tail bumping. Missed its combat patrol endurance by 15 percent. Missed on required maintenance and reliability. Missed the required combat ceiling. Missed the wind over deck required for approach. Managed to meet required ranges afte r 2,000 pounds of fuel were added. And the original advertised cost was soon forgotten after Grumman threatened to close down production. Now, despite violating all these so-called requirements, we are today told at the same time the Navy is tremendously happy with the F-14. Some argue we should buy more. We are also asked to accept that the F-18 is the only acceptable airplane because the others didn’t quite meet all requirements. Finally, we are asked to believe all the cost and 32

performance nu mbers toute d fo r the F-18, an d th at the y w ill come ou t just as was said. With ou t bein g an exp ert, all of these pleas just don’t make sense together. It ju st seems to me th at we better reserve commitments based on w hat we’re g oin g to get, not on wh at we hope we’ll get. My propo sal would perm it us to do that.

OPT ION 2 : CANCEL F - 1 8 ; BUY MORE F -1 4 ’s One oth er option th at ’s being prominently pushed is to kill the F- 18 and buy more F-1 4’s instead. That may or may not eve ntually make sense, bu t to do so today is entirely un called fo r, I believe. The F- 14 p rod uction line isn’t going to be shut down. In the m ean­ time, let the F- 18 pro gram continu e if on ly to provide the options for oth er foreig n sales. Bu t I think it does much more than th at. Th e v ast bulk of th e foreig n countries are yet to be heard from, many o f which have in the past expressed a stro ng preferenc e fo r a twin-eng ined, land- based fighter. At the same time, we’ll find out m ore about j ust wh at the F- 18 will do and cost. Plu s, under my pro posal, we could proceed to develop a new engine the N avy says th ey will need for the F-14 anyway . Th ere ’s anoth er thing th at ’s aw fully c urious about these argum ents to go back to substitu te the larger, “mo re capable” Grum man F- 14 instead of buyin g s maller F- 18 ’s. The same argume nts should, theoret­ ically, apply to the F-15 and F-16. On Au gu st 16 last year, th e presi­ dent of McDonnell Douglas wro te to Secre tary Clements offe ring to produce 300 more F- 15 ’s at a $5.8 million uni t flyaway cost in stead of a lig htwe igh t figh ter. Tha t offer was made befo re McDonnell Dou glas won the Navy F-18 , however, and since then we haven’t heard much about the unsolicited proposal which was made.

OPTIO N 3 : CANCEL F - l 8 J HOLD NE W COMPETITIO N An othe r option the committee could consider is to cancel the F-18 and hold a new competition. I can’t see that for a couple of reasons. Ev er since t he last Nav y fighte r pro gra m—the F-14—went a little off ta rget, the whole force s tru cture has been u nde rcut. Th e N avy con­ tends th at the cu rre nt F-4 Phantoms sim ply won’t last much long er and th at, by 1981, they won’t hav e enoug h fighters to ou tfit the carriers. I don’t think a brandn ew c ompetition could pro vid e new ai rc ra ft in time unless it was severely rushed. Plus, the Nav y contends they wou ldn’t get much better proposals th an those the y received. I would pr efer to see us tak e advanta ge o f wh at we’ve p aid fo r up to th is po int b ut keep some c ompetition in step with the F-18.

OPTION 4 (MIDDLE-GROUND PROPOSAL) : CO NT INUE BO TH ; INTRODUCE CROSSOVER CO MPETITION As I have sta ted , Mr. Ch air ma n, I would like to propose th at the comm ittee consider a positive, middle-gro und option th at wou ld take advanta ge of how fa r we’ve come today y et hold open some s afeguards. According to the Direc tor of Defense, Research and E ngine ering, it would cost only $15 million in basic design effo rt and wind tun nel 33

testi ng to design an F- 16 version th at could qu ali fy for the Navy. Then, to proto typ e on an aus tere basis would tak e anoth er 2 ye ars f or a to tal of $50 to $80 million. Equiva len t amounts sh ould finance austere develop ment of a land-based version of the F- 18 as its dev elopment proceeds. I un derst and th at t he concerned contract ors w ould, in fac t, be able to execute such activity for thi s am ount. Th e cost of austere prototyp ing com petition, then, could be ex­ pected to total som ething un de r $200 million over the 3 years. We could stop at any point th at either ai rc ra ft prog ram began to falter . It may t>e th at you would invest $15 million and then you would see th at at th at point you wanted to stop one of the com petition s. We could con centrate on either one at any time. We could choose to con­ tin ue into a more extensive dem onstration. And, in the end, we will have some firme r conclusions on costs, p erform ances, and comm onality for less th an 1 percen t of the total life cycle costs w’hich are a t stake. Th e sa vings could easily be in the billions.

OBJECMTONS TO CH ILES PROPOSAL One obje ction is th at t his pro posal will cost more money now which, the D OD fears, will come o ut of other programs. They believe compe­ tition and ha rdware dev elop ment has been carried fa r enough. I stre nuously disagree. Tim e and again , we pay more later by cu tting corners at the beginning. An other oppos ing arg um ent says th at there can nev er be a carrier- suitable F-16 version. T hat ’s no t true. In the first place, the F -1 8 itself was jud ged only “m arg inally acceptable.” Th e Navy concedes it has begun inv estig ating seven substan tial design changes to keep the al­ ready too hig h ca rri er appro ach speeds from ge tting worse. A new F- 16 design, with less com monality, can be acceptable to the Navy. Dr. Cu rrie has said so. Navy rep resent atives have said so in private conversations. A Navy version of the F-16 could be even more attra ctive if some of the mission requirements were rela xed to give it cheaper avionics, a change th at is b eing considered right now anyway for the F -18 DS AR C review. I am not say ing common F- 16 vers ions is necessa rily the best way to go—bu t it could tu rn out to be a ttr activ e if othe r thing s don’t come throug h according to plan. An oth er arg um ent against my proposal is th at we will never wa nt both Air Force and Nav y both flying F-18 's—it will be too costly, giv ing the Air Force fa r more ca pabil ity than the y say the y need. Bu t th at is a th in arg um ent because the OS D com monality repo rt of last Ju ly shows the total life cycle costs of common F-1 8’s is on ly about 1 percent more expensive than wh at the y are doing now—b uying b oth F- 16 ’s and F- 18 ’s. Th at ana lysis cau tion ed the numbers were only good to abo ut 2 percent anyway . So, the final arg um ent used was, “Ther e might be an ines capable tendency, on th e p art of the A ir Force, to add more expensive equ ipm ent to the lar ger, more spaciou s, F-18 airframe.” Wh en the Pentag on reso rts to marg ina l a rgu me nts like th at , I ge t an uneasy feeling. 34

EFFEC T OF PROPOSAL ON EUR OPEAN SALES The only rem aining argume nt th at really concerns me—an d I know it does you, Mr. Ch airma n—is the effect on the sale of 348 aircraft to the Eu ropean consortium —Belgium, Denm ark , Norway, and the Netherlands. I have he ard arg um ents on both sides and I would like to h ear more du rin g th e tim e before the committee reaches a final vote. On the one han d, I can see the argum ent th at any proposal to hold open options—even though the F-16 p rog ram continues—would neve r­ theless undermine confidence in the E uro pea ns. We have to recognize th at the Eu rope an’s choice of the F- 16 over the Fre nch Mirage was not an easy one for those four governm ents. Given our bala nce-of-payment and unemployment problems, I and this comm ittee would not be serving the American people if we took any actions to unnecessarily jeopardize those sales. T don’t want to do that. If the Sen ate took any actio n th at would quickly and surely drive the European s to buy the French Mirage, I would have to recon­ sider the extent to which we continue com petitive options. On the othe r hand, I have heard argum ents th at my mid dle-gro und proposal would, first, no t jeopardize European sales, and second, these sales don ’t matter anywa y in the larg er scheme of things. Fi rst, you could arg ue m y proposal would do absolutely nothing to dis tur b the F-16 pro gra m as long as every thi ng goes according to plan . The Europ ean s have alre ady been tol d formally by the Defense De partm ent th at, and I quote, “Production quantities and schedules are dependen t upon success in the development pro grams from a performance and cost sta ndpoint. Fina l execution of these plans is dependent upon congressional app rov al which, und er U.S. Gov ern­ ment procedures, must be sought on an annual basis. In discussion with key congressional leaders, the y have assu red the Depar tment of Defense of their sup port in obtainin g the required app roval of Con ­ gres s fo r the a ir combat fighter prog ram .” I f the Defense De partm ent has told as much in wr iting to the Europ ean s, you could argue th at my proposal would not undermine confidence b ut, on th e contrary, all concerned should welcome the saf e­ guard s of altern ative, lower cost figh ter options. There may be no adverse, impact on the Eu rop ean comm itment whatsoever. The n, the re are the arg uments that the Eu rop ean sales are no great barg ain f or the Un ited Sta tes anyw ay:

DETAILS OF FOREIG N SALES ARRANGEMENTS

American, not Eu rop ean tax pay ers are going to bear the brun t of wha tever the pro gra m will cost in the end. The Europ ean s will build 10 percent of all our F- 16 ’s in exchange for our building 40 percent of theirs. If we sell more than 2,500 F -lC/s, the Europe ans will be tak ing jobs away from American s. We have sold over 4,800 F- 4 Phnntoms. Estimates of sales to Iran , German y, and the total Air Force F-16 buy exceed 2,200. Eu rop ean ind ustry will benefit tremen dously from the inflow of American technology. Even if we make th e sale th is time around, tr ai n­ ing foreign companies to produce h igh technology’ hardw are will come back to ha un t us late r. 35 The Europeans struck a tough bargain, covering everything from Belgian machineguns to liquid gas tankers. In sum, there are serious arguments over jeopardizing European sales. To say the least, I want to hear more. I would like to hear from the Ambassadors of the four European countries as to whether or not adopting my proposal means they would switch to the Mirage. I would like to hear more about which key congressional leaders assured their support over a year ago and I would like to discuss the reasons with you and whoever else gave such assurances. I would like to review the commitments made in Deputy Secretary Clement’s letter of July 11. 1974, and Air Force Assistant Secretary Schrontz’ letter of August 21,1974.

SUMMARY To summarize my proposal, Mr. Chairman, I am only arguing that we could buy a little time and information as these two programs proceed along their current plans. If it turns out they both cost more and do less than promised, we can always buy more F-14’s and F-15’s. If only one falls flat, we still have kept open some attractive options for common Air Force and Navy aircraft, something we can all sup­ port if we look at a list of how many different kinds of weapons we now have. If both air combat fighters turn out as good or better than pre­ dicted, we can proceed to buy them both according to plan. We have disturbed nothing, but in the meantime also bought another engine option and options for other foreign sales where there is already foreign interest. And, I believe, the modest cost of doing all this is more than worth it in the long run from a pure procurement standpoint. Even if a poker player has the winning hand, I would prefer to pay $1 to see it before he takes a $100 pot—especially if he has a well- earned reputation for bluffing. The E-14 and F-15 aren’t going to disappear. And both the F-16 and F-18 programs can proceed along development to try to keep the promises that have been made. But we will be hedging our bets, pu t­ ting in some hard competition, holding open our options. T hat is all I am proposing. Mr. Chairman, I offer these views to be of assistance to the com­ mittee. I, like you, have been concerned over the foreign sales argu­ ment. I would like to be convinced tha t mv proposal, first, seriously jeopardizes European sales and, second, that these sales are really that, important before I would reach any other position. Beyond that, if my proposal cannot be accepted I would have to reserve judgment. I would lie glad to discuss this problem further and, whatever your decision, to offer whatever support I can. Thank you, again. Chairman M cClellan. Thank you. Senator Chiles. If I understand you, you would simply continue the competition between the original competitors until we get prototypes and can make the comparisons and evaluations? 36

CONTINU ED DEVELOPMENT OF BOTH PROGRAMS

Senator C hil es . 1 would just keep it going so th at you keep it alive and you just see w het her these o verrun s will develop. It seems like to me if each ai rc ra ft can do wha t it is proposed it can do, nex t year we will have spent $15 million apiece perha ps on these airc raft. I t hink we will be able to be much fu rthe r along a nd see what they are d oing and determine the n, do we wa nt to extend it any fu rthe r, and do we wa nt to stop one of them the n, and do we want to lock them both in. You won’t he delaying the actu al pro duction of these planes at all. We would simply be kee ping our option s open and makin g sure th at we are not ru nn ing in to th e overrun. Chairma n M cClellan. S o you would con tinu e develop ing both planes, continue th e com petition for a year? Senator C hiles . T ha t is correct. Ch airma n M cClellan. Thank you. Senator You ng, do you have any questions? Senator Y oung. I don’t quite un derst an d the com petition you are suggesting. Senator C hiles . W ha t I am saying is you would not jus t lock the F- 16 into pro duction as bein g the plan e th at is going to be the Ai r For ce plane, and the F-18 as being the Navy plane. You would spend $15 million on th e F -18 a dditio nal money and go alo ng with everyt hin g else you are doing, a nd because these planes are going to come on line in the 1980's—you a re not stoppin g any thing in effect. W ha t you arc saying is you are going to do some wind tun nel tests on the 16 to determ ine whe ther you can make it carrier based, and whether you can develop a carri er cap abi lity . At the same time you would spen d a little money on the 18 to see whether you can suit the Air For ce requ irem ents. At the same time you are getting fu rth er, as they get fu rthe r along in their design, the figures begin to h ard en up of what the actua l costs o f production are goin g to be, and you haven't shut an ything off. Senator Y oung. Thank you. Chairma n M cClellan. Y ou d on 't mean for LTV to continue t ry in g to develop a Navy plane? Senator C hil es . No. sir. Chairma n M cClellan. Except to tak e the two as the potential con­ tra cto rs and have them fu rthe r develop th eir plane before locking them into production. T ha t is what you mean ?

DELAY TO NAVY PROGRAM

Senator C hiles . Tha t is correct. I don’t think that the F- 18 ever rea lly had good com petition as the y went to th at design, and T do n't believe that. Bu t I do kin d of think th at 1 buy the Navy’s arg um ent th at to star t over again on a new Navy plane would delay them suffi­ cient th at I think you would almost have to make the decisions to go with buying the 14's, because the P hanto ms are weighing out, and when you make th at k ind of size buy that you would have to make to replace the Phantom s, you might as well say you can go with 100 o f the 14 aircraft. Chairman M cClellan. Sen ato r Pastore, do you have any questions? Senator P astore. I quite agree with you that the re is q uite a lot of 37 guessing that goes into some of these developments, but I am a little bit concerned about the guess on the fact that we are not playing right in the hands of the manufacturers of the Mirage with your proposition. Could you be a little more specific about that? You talk about talking to four Ambassadors. You don’t know how far you would get with them, but the point I make is that unless you definitely make a decision in due time and get into production, don’t you think tha t we are jeopardizing the ability to sell these planes abroad ? Senator ( hiles. M ell, I think that could he a legitimate argument. I would like to hear more on that. Senator P astore. 1 would like to hear more on that. Senator C hiles. I don’t say that tha t couldn’t be a legitimate argument. Senator P astore. Because we thought we did score when the Belgians bought our plane. SALE TO BEL GIU M Senator C hiles. I think so, and I think the Belgians tried pretty hard with us and got a pretty good deal. 1 think the reason th at the Belgians decided finally they would go with our plane is because they wanted the new technology. The Mirage is no new technology. It is an old plane. It is an old engine, and they are not developing anything new. 1 J Now, when they get our engine, and they get the plants over there that they are going to get, they are getting the latest technology. So there is a quid pro quo, and a very good one for them. Senator P astore. I) o you think we could actually determine the overrun structure merely by going up to the prototype? Senator ( hiles. Every step that you can go you get harder figures, much harder figures, because you start solving what can lie the prob­ lems that come up. Senator P astore. I know you get harder figures, but do you get figures that are hard enough? Senator C hiles. M ell, you cut down the probabilities tremendously as you go ahead, if you go further. Senator P astore. You see your prototype costs always are tremen­ dous because there you are experimenting, and innumerable things could happen. When you get into actual production, and your produc­ tion line is accentuated, the cost begins to come down somewhat. Be­ cause therein lies the saving if there is going to be any saving at all. I think this is a fine presentation that I think is provocative, and I would like to hear the rebuttal to it.

oppositiox to chiles’ proposal Senator C hiles. I am sure tha t you will. It is a good proposal that the Naw doesn't like?and the Air Force doesn’t like, and McDonnell Douglas doesn’t like, and LTV doesn’t like. And I haven’t found anybody that likes it. Senator Pastore. But you like it. Senator C hiles. That is why I think it is pretty good. Senator P astore. I want to congratulate you. There is a lot of thought that has gone into this. 38 Thank you very much. Chairman McClellan. If there are no further questions, thank you very much, Senator Chiles.

PREPARED STA TEMENT OF SENATOR JO H N TOWER Our next witness is supposed to be Senator Tower. He is not here, but he has sent his statement which will be inserted in the record at this point. [The statement follows:]

Statem ent B y S enator J oh n T ower (R -T ex.) on th e F- 18 A ircraft P rogram Mr. Chairman : Thank you for granting my request to make a stateme nt on the F-18 program. I do have some points for consideration I want to leave with the Committee on this most im portant matter. We all know that the three LTV/General Dynamics proposals subm itted during the competition were judged as not being car rier suitable. I think it is also widely known that the LTV Aerospace Corporation has a long and distinguished career in building Navy a ircraft. 1 do not believe anyone would dispute the point that LTV is fully aware of what is required to make an air craft car rier suitable. Yet all three of their proposals were judged not ca rrier suitable. Mr. Chairman, in trying to sort this out, one possible conclusion I come to is that the F-16 was not the baseline from which to star t in order to get a carrier suitable fighter. I questioned Admiral Houser on this point and asked him if, in his opinion, any derivative of the F-1G could have been made a carrier- suitable aircraft. Admiral Houser’s reply, in part, was : “From the report tha t Admiral Lee provided to the CNO, which I had the privilege to see, and we discussed it several times, there does not appear to be any t ha t would be carrier suitable.’’ To be totally objective about this, 1 do not believe Admiral Lee agreed completely - with Admiral Houser. However, my point here is that the Congress, in cancelling Navy’s VFAX pro­ gram and directing Navy to select a derivativ e from the Air Force lightweight fighter program, may have severely restricted the quality of the air craft tha t Navy could get. Therefore, Mr. Chairman, I believe the question is whether the Navy, from the way this program has evolved, is now getting the aircraft it needs. In spite of some Navy testimony to the contrary, I do believe tha t is the case. I would like now to make a few comments relative to the attack version of the F-18. Navy has testified that the A-18 will replace the A-7E force between 1985 and 1990 and that the A-18 can be expected to have an operation al life of from 15 to 20 years. Mr. Chairman, I question that the A-18, as it has been described, and with its apparen t limited growth potential, will be able to handle the attack mission through tha t time period. I believe we have learned from experience that as the thr eat increases and as defenses become more difficult, it has been neces­ sary to specialize our weapon systems in order to be successful against a target. During our Tactical Air Power hearings on the F-18 we were privileged to hear Captain Thomas Watson, an A-7 pilot and former Air Wing Commander from the CONSTELLATION. In commenting about the A-7 and requirements for future atta ck aircraft, Captain Watson said : “And when you look into the future, and I think we are looking ten, twenty years from now in airplanes, we must have more agility than we have in the A-7E by quantums, not just smaller airplanes, but by quantums." Mr. Chairman, I do not believe you can find an aero nautical engineer who would testify that the F-18e represents an improvement over the A-7E by quan­ tums, not qunntum, but quantums. Yet. this is the air craft Navy plans as a replacement for the A-7. As I indicated earlier, I have serious reservations that the A-18 can be as effective as necessary for atta ck missions during the 1990s and beyond. I think an aircraft more specialized for the atta ck mission will be required. While the Navy’s c urrent atta ck force of A-7Es is going to require eventual replacement, I do not think it makes sense to replace the A-7E with an air cra ft that does not offer the degree of improved performance necessary. The decision for Navy to proceed with a new air craft should not be made on what we have seen thus far. Certainly the A-18 does not till the requirement. Personally, Mr. Chairman, I do not see any requirement at the n»ciiient to concern ourselves with a replacement for the A-7. Contrary t- lmt N*iw implied in testimony the A-7 can be improved to the w ‘ j , attack mission into the early 90s. For exao”" - — d ~ s*i - — P*e, the A-7E can be equipped with a 23,(XX lb. thrust engine w it ' afterburning, FL1R (forward looking i n r re d jG ( a 8 e r g U l b o m b a n d H A R M f on , V - >’ (high-speed anti-radiation missile). 1 lie new ® u g i n e will enable the A-7 to sustain 5.43Gs at .85 Mach and increase attack speed from 505 knots to (XX) knots. The approach speed of me improved A-7 will be reduced to 128 knots from the current 139 knots. The estimated program unit price is about $6.5 million for 400 air craft in FY 1975 dollars whereas the estim ated program unit cost for 400 A-18 air craft is $13.3 million in FY 1975 dollars. These performance figures would, of course, be subject to verification but. to date. Navy has not seen fit to make an analysis of improving its A-E7 fleet versus procuring 400 A-18s. I urge the Committee direct the Navy to conduct this analy­ sis prior to making any furthe r decisions on this program. Until that analysis is made, it is obvious that Navy has not fully examined otb«; alternativ es that might prove more effective. Thank you.

GENERAL AC CO UN TING O FFIC E

STATEM ENT OF PA U L G. DEM BLIN G, G EN ERA L CO UN SEL, G EN ERA L ACCOUNTI NG O FFIC E ACCOMPA NIE D B Y : PA U L SH N IT Z E R , ASS OCIA TE G EN ERA L CO UN SE L, GAO JE R O M E ST OL ARO W, D EPU TY D IR ECTOR, PROCUREM ENT AND A CQ UIS IT IO N S SY ST EM S D IV IS IO N

INTRODU CTION OF ASSOCIATES

Ch air ma n McClellan. The next witn ess is Hon. Pa ul Dem bling, Gen eral Counsel of th e Genera l A ccounting Office. Will you come to the h earin g tab le, please. You m ay introduce your associates fo r the record. Mr. Dembling. Tha nk you very much, Mr. C hairm an. On my left is Mr. Paul Sh nit zer, Associate Gen eral Counsel of t he GAO, and on my righ t is Mr. Jerome Sto larow, Deputy Direc tor of the Procure ment and Acquisitions System s Division. Ch airma n McClellan. Very well, you may proceed.

DECISION ON LTV AEROSPACE CORI’., Il—183851

Mr. Dembling. I have a short statem ent, Mr. Chairma n. We have been requested to summarize our decision in the m atter of LTV A ero­ space Corp., B-183851, dated October 1, 1975. Th is sta tem ent is in response to th at request and concerns the role of the Gen eral Accou nt­ ing Office in review ing the Na vy ’s selection of the F- 18 as its air combat fighter. As a majo r pa rt of this role, we recently considered the pro test of the L TV Aeros pace Corp, again st the N avy’s selection of th e McDon ­ nell Douglas Corp, to develop the F-18. Th e essence of LTV’s com­ pla int was th at the selection of the design proposed by McD onnell Dou glas was contr ary to law and to pub lic policy, and th at L TV h ad not been treated fairly in th e source selection process. LTV’s prote st was han dled in accordance with our bid prote st pr o­ cedures, pu rsua nt to which we consider prote st again st the aw ard or prop osed aw ard of Governme nt con tracts. Ou r determinations under these procedures are lim ited to the leg ality of the Gover nment ’s in ­ tended or actual course of action, measured in light of the sta tutes and impleme nting regula tions pe rta ining to Gove rnm ent contracting. They the ref ore do not involve cons ideration of such things as program effectiveness and policy decisions, which we do consider sep ara tely in our au dit reviews. (41) 42

In accordance with our hid pro test procedures, we requested and received a fully documented report from the De partm ent of the Navy. In addition, we conducted an investigation in orde r to obtain da ta with respect to the technical and cost issues raised by the pro test. Ou r decision was based on submissions from the Nav y, LT V, a nd McDon ­ nell Douglas, and on inform ation obtained throug h our indepe ndent audit review.

GAO STUDY NOT A COMPREHENSIVE REVIEW OF AIR COMBAT FIG HTER PROGRAM Since this m atter was considered in the context of a bid pro test and was the ref ore narrowly focused, we d id not engage in a ma jor , com­ prehensive review of the Navy’s a ir comb at fighte r pro gram. Ra ther, we considered whether the Navy’s aw ard of sho rt-ter m susta ini ng eng ineering contract s as a result of its selection decision was illegal or contr ary to public policy, as claimed by LT V, and wheth er the Na vy’s conduct of the competition was un fa ir o r otherwise impro per. Ou r review of the competitive aspects of the procurement covered certain technical ma tters, particularly with respect to the prop osed engines. It also included a review of the Na vy’s cost eva luation o f the com peting proposa ls. However, as was sta ted in the decision, we did not consider nor deal with the overall efficacy of the Navy’s decision either in terms of pro gra m effectiveness or lowest possible cost.

LEGALITY OF F -1 8 SELECTION We initially considered w hether the selection of the F -18 was illegal since the Air For ce had selected the F-l fi and the conference rep ort acc ompan ying the 1975 fiscal y ear D OD A pp ropriatio n Act provided th at “adapta tio n of the selected Air Force air combat figh ter . . . is the prerequisite for use of the funds p rov ide d.” We recognized that such language reflected the congressional de­ sire that the Nav y select a fighter airc raft design derived from the design Selected by the A ir Force for its air combat fighter. We fu rth er recognized that as a practical matter the Nav y had to deal with th at language. How ever, we concluded th at since the law itself was clea r and d id not include simi lar restrictive language , the Congress had not imposed such a restric tion of the Navy as a matter of law. Th is con­ clusion was consistent with the position the General Acc oun ting Office has taken over th e years, both in decisions of the C om ptroller General and in rep orts a nd oth er correspondence to Members o f Congress.

CONTRACT AWARDS IN CONTEXT OF PUBLIC rOLICY W ith reg ard to the claim that the contract award s were contrary to pub lic policy, our review ind icated th at the cou rts have held con­ tra cts to be void as again st public policy if they call fo r a res ult which is c on tra ry to law or if they result from illegal behavior. Since the contracts awarded by the Navy did not come within eit he r cate­ gory and since there is a strong presum ption in the law in fav or of the va lid ity of con tracts, we found no basis for concluding th at the award s should be reg ard ed as inv alid on pub lic policy grounds. Ou r legal review also encompassed questions concerning repro­ gram ing under which executive agencies in conjunctio n with the Con- 43 gress may shift funds from one program to another within a particu­ lar appropriation account. The Navy believed that its proposed use of funds for the Navy air combat fighter was communicated to and ap­ proved by the cognizant congressional committees, and tha t it there­ fore complied with the spirit and content, if not the literal require­ ments. of DOD’s reprograming directives. These directives deal with internal procedures and do not purp ort to affect rights under con­ tracts. Therefore, any failure on the part of the Navy to comply with them literally did not bear on the legality of the Navy’s expenditure. In our decision, we noted that section 843 of the 1975 DOD Appro­ priation Act precluded the use of funds being appropriated by that act for the presentation of a reprograming request to Congress. How­ ever, we held that this provision could not be used as the basis for attacking an otherwise legal contract award.

FAIRNESS OF COM PETITION In determining the overall fairness of the competition, we consider LTV's claim tha t the basic Navy solicitation required the NACF designs to be derivatives of the F—16, the selected Air Force air com­ bat fighter design. Our examination of the procurement documents indicated tha t the Navy was seeking the best performing aircraft design available, which ideally, but not necessarily, would be a design based on the F-16. We found that the language of the solicitation was directed tow’ard utili­ zation of the hardware and technology developed by DOD in its light­ weight fighter and air combat aircraft programs, and not the hard­ ware and technology associated only with the F-16 design. We noted that while the Navy desired maximum commonality with the previously developed technology and hardware, the solicitation documents encouraged offerors to make tradeoffs in order to meet cost and performance requirements. We also noted tha t LTV’s pro­ posals reflected an awareness that offerors were not restricted to achieving commonality only with the F-16 design, and tha t in fact one of LTV's proposed designs differed substantially from the F-16 design. Accordingly, it was our view that the offerors were on notice that the Navy competition was not to be based on a Navy derivative of the F-16 design, and that LTV therefore could not have been prejudiced or otherwise treated unfairly by the Navy’s consideration and ulti­ mate selection of a design not based on the F-16.

ACCEPTABILITY F4 04 ENGINE We also found that the F404 engine proposed by McDonnell Douglas was authorized for use with the F-18. This is basically the J101 engine, which was listed in the solicitation as acceptable, with certain modifications. Finally, in the cost area, we did not consider whether the F-18 represented the least costly acceptable alternative that would satisfy the Navy's needs. Rather, we reviewed the Navy’s cost evaluation of the competing proposals to see if the evaluation was fair and in ac­ cordance with both projier procedures and the established evaluation criteria. We found tha t it was. We did point out th at while the F-18 44 design will cost more than designs based on the F-16 deriva tive designs, cost in the eva luation was an im po rta nt but not con trollin g factor, and th at the Nav y considered this cost difference to lie com­ pletely offset by the superiority of the McDonnell Douglas design.

GAO DECISION In summ ary, we determ ined th at the Navy's actions in aw ard ing the sus tainin g eng ine ering con tract were neith er illegal nor impro per. We did recognize th at Congress has been closely mo nitori ng the Navy’s efforts to develop a low-cost figh ter, and th at the pro ject would be fu rthe r scrutin ized before full-scale development fun ds are provided. Pre sen tly, we are exa mining variou s aspects of the Navy's source selection decision, from an audit standpoint, both in response to specific requests from Members of Congress and as a pa rt of our annual review of m ajo r weapon system s. Th is ongoing work includes a comparison o f th e development, pro curement, and life cycle costs for Navy derivative s of both the F -16 a nd F-17 airc raft. Th is concludes my prepar ed statem ent. We would be pleased to respon 1 to any questions the subcom mittee may have. In t 1 is connection, I might also request if I may respec tfully, to have the e nti re decision p rinted in the record. Chairma n M cClellan. We have provided that a sum mary of it be included in the record, with the entire decision rem aining on file for ie Terence. I wa nt to get a b ett er und ers tan din g of these int erp retations. Ear ly in y our s tatem ent you said, “ we in itially considered whether the selec­ tion of the F-18 was illegal since the Air For ce had selected the F- 16 and the conference report acc ompan ying the 1975 fiscal year DO I) Ap prop ria tio ns Act provided that “a dapta tio n of the selected Air Force air combat figh ter is the pre req uisite for use of the fun ds provided.”

CON FERENC E REPORT LANGUAGE NOT LEGALLY BIN DIN G Now, if th at was not a determinate fac tor in your decision, wh at impact does it have as a m atter of law? What potency does t hat state­ ment have in the rep ort of the Congress ? Mr. D embling. Well, I guess we were dea ling with it from the sta ndpoint of a legal determ ina tion—w hat the Congress meant. It is a persuasive argum ent as to what the Congress intended when there is ambig uity in the law itself. Whenever the Congress has wan ted to place restric tive lan guage into statu tes, it has done so. In fact, in this specific 1975 app ropriatio n act there was restric tive language on other por tions of the pro gra m, so th at the feeling has lieen all along in inter preta tio n of repo rts of this typ e th at unless the Congress actually places it in the sta tute it is persuasive argu me nt. It indicates th e feeling of the Co ngress, and it is instructive to the agencies that have to deal with the committee. Chairma n M cClellan. But it is not bin din g on the agency? Mr. D embling. It is not bind ing on the agency. Chairma n M cClellan. Well, we are lea rning something. I do n't know what purpose it serves then, to write the intent of the conferees into the report language. 45

Mr. Dembling. This has l>een the standard thing. Chairman McClellan. I say I am learning. Mr. Dembling. There have been court decisions and GAO decisions. Chairman McClellan. So this language had no probative force so far as your determining the legality of it. We might just as well have not written it. Mr. D embling. Insofar as determining whether the Navy could or could not go forward with it from a legal standpoint, that is correct. Chairman McClellan. In other words, it did not compel the De­ partment to comply? Mr. Dembling. That is correct. Chairman McClellan. This presents something the committee is going to have to consider very carefully.

MORAL OBLIGATION INC URRED BY REPORT LANGUAGE

Senator Pasture. It amounts to the same thing as the sense of the Congress. Congress can express its sense, but the administration doesn’t have to follow it as a legal responsibility; that is what you are saying. But there certainly is a moral responsibility to abide by it? Mr. Dembling. Yes. And I think that we pointed tha t out in the decision, that the Navy has to make its peace with the Congress, but no law was violated. Senator P astore. It was an affront to the intention of the Congress. Chairman McClellan. I would like to know what the probative force of this language is in a conference report and what probative force is given to it by the General Accounting Office. Mr. Dembling. In terms of this, we feel the conference report or any report which indicates what the Congress—what the committee had in mind at the time that it passed on the legislation is helpful. If there is an ambiguity in the law and you have to go back to the conference to see what did the committee intend by that language, then I think that it is useful. Chairman McClellan. What do you think the committee intended by this language?

RESTRICTIVE LANGUAGE IN TH E LAW

Mr. Dembling. I think the committee intended to instruct the Navy as to how it ought to carry out its program. However, the committee did insert restrictive language in the statute in other areas, and for example, title III of the act provided that not less than $355 million of the Army's operation and maintenance appropriation shall be avail­ able for the maintenance of real property facilities. There is a restric­ tion right in the act. Similar restrictions were placed on the Navy, Air Force, and other DOD elements. However, when it came to this asjiect. it could very easily have been placed in the act. and had it been placed in the act, it would certainly have been a restriction, and then it would have been an illegal act for the Navy to have done what it did. Chairman McClellan. As the language was included in the con­ ference report, it was not legally binding for the Department? Mr. Dembling. That is correct.

SO-913 0 - 75 - 4 46

Chairma n M cClellan. An d from the sta nd po int of the General Accou ntin g Office in ev alu ati ng and rend ering a decision on the legal­ ity, if we mean to place a res tric tion, then it mu st be done in the a ct and not in a reco mm end atio n in a rep ort by the Conferees. Mr. D embling. Tha t is right. I can draw an analog y from lu mp sum appro priation s. Chairma n M cClellan. I wa nt th at fact established. My next ques­ tio n is, your decision did not deal with the moral obligation t hat the Navy may have had. You s imply dealt with the legality of it? Mr. D embling . We d ealt with the le gality of it. We did make re fer­ ence to the fact th at the Nav y probably could n't ignore the langua ge, only th at failu re to comply did not make the c on tra ct illegal.

GAO DECISION BASED ON LEGAL RAT HER THAN MORAL BASIS

Ch airma n M cClellan. Y ou are not s ustai ning the ir action from a mo ral sta nd po int; bu t on a str ictly legal basis, you say the y did have the rig ht? Mr. D embling. Yes. Ch airma n M cClellan. Are there any questions? Senator Y oung. D id you find any contr adiction in the lan guage in the conference rep ort than in any provisions of the bill itse lf? Mr. D embling. I do n't t hink we d id. These were lum p sum ap pr o­ priat ion s which we didn’t find an y res trictive la nguag e in the act itself th at pro vided or carried out the prov ision th at was stated in the con­ ference re port. Senator Y oung. Th is brings up a new precedent so fa r as I know about. Usual ly when the re is no contradic tion between the la ngu age in the rep ort of the conferees and the bill itself, you would think, how­ ever, whoever it affected would abide by the conference report. Ch airma n M cClellan . Y ou say there was no conflict between the rep ort language and the law itself? Mr. D embling. It was not mentioned. Ch airma n M cClellan . Did you find any conflict between this sta te­ ment in the conferees' rep ort and the App ropriatio ns Act itse lf? Mr. D embling. No; we did not. Senator P astore. T here was a contr adiction between writ ing it in the rep ort and speci fying it as a res triction by sta tutory law, and within the same docume nt th at was presented to the Defense Dep ar t­ ment, here we had in the law its certain lim itations, and yet the Con­ gres s did not th ink it impo rta nt enough to write th at limita tio n in the law. I t w rote it in th e re port. I have been here fo r 25 years, a nd I have attended God know s how many conferences, and a ny time you want to avoid something, you say, ‘‘Write it in the rep ort, when you want to avoid responsibility.” If Congress wants a lim itation, the n the y ou gh t to write it in the law, and that is all you are deciding. Th e fa ct th at we did not wr ite it in the language, there was no legal violatio n. Mr. D embling. Yes. Senator Y oung. Th ere is some difference between the lan guage in the conference repo rt and in the Senate or House bills. Senator P astore. In o ther cases, we had gone out of our way to write it in the bill. In this pa rti cu lar case, we di dn ’t do th at , and the y 47 readied th e conclusion t hat since we did n ot pu t it in th e law, the re was no violation. Se nator Y oung. I agree on the legality. Senator P astore. Tha t is all he decided.

FUTURE IMPLICATIONS

Ch airma n M cClellan. W ha t I'm wonde ring now, is th at if every time we wish to give guidance to the De partm ent, we hav e t o write it into rig id law. Is th at the way we have to deal with the Defense Departm ent? Mr. D embling. I f you want to make it a m atter of legal com mitment and req uire th e agency to comply wi th wh at the Congress desires from a legal sta nd po int, it h as to be, or should be, in th e law. How ever, when you bring up the mora l com mitment or dealing with the Con­ gress, it seems to me that an agen cy pay s a lot o f a tte nti on to what is in the conference rep ort, o r a rep ort o f the committee. Ch air ma n M cClellan. Som etim e it does, bu t in th is instance it di dn ’t. Mr. D embling . Usually I th ink it pays attention because it must make its peace with the committee and still has to ap pe ar before the comm ittee, and still must ge t its ap prop ria tio n from the committee. Ch airma n M cClellan. Is n't th at ju st your hope or exp ectation of wh at they would do? Senator P astore. I un derstand in these presen tation s the Nav y De partm ent did t ake it up with the congressional leaders. Ch air ma n M cClellan. I am tryi ng to make a deter mi natio n for tho futur e, th at if Congress really wants its wishes obeyed, they must be wr itten into law. Mr. D embling. T hat is r ight. Ch air man M cClellan. We cannot hope to accomplish it by express­ ing o ur viewpoint in persuasive lan guage in a r eport, because that can be ignored . Senator I nouye. If the y ignore it, we follow’ it up by punishm ent, isn’t that w hat it is? Mr. D embling. Yes, sir.

COMPARABILITY TO “ SENSE OF TH E SENATE” RESOLUTIONS

Senator H ruska. I s the re some comp ara bil ity to the situation embrace d in a sense o f the Congress resolu tion or a sense of the Senate reso lution? There it is unive rsally agreed th at it has no force of law, and it is simply the sense of the Co ngress thu s and so. Th e p resum ption is th at if the C ongress rea lly wante d to put bind ing and legal effect into th at situatio n, they would not have such a resolution but they would have had a legislative act. Now’, t hat is a much stron ger case than here, where it is not even said in our conference rep ort, it is th e sense of th e conference. I t is the sense of the two bodies because the y appro ved the conference rep ort, but if the express reso lution say ing it is the sense res ults in no legal bin din g effect, c ertai nly in th is lesser sit uatio n there could not be. I am intere sted in the sta tem ent th at you make here , th at this conclusion was con sistent with the pos itio n th at the GA O has taken 48 over the years, both in decisions of the Comptroller General and in reports and other correspondence to Members of the Congress. This is not peculiar to the Defense Department, is it ? Mr. Df.mbling. No. Senator H ruska. It is a universal application wherever we have a similar language situation. Mr. Dembling. That is right, and in the full decisions we cite those examples, so that one can understand what we are getting at. Senator H ruska. I agree with the chairman, that both Houses of Congress should take precaution when they are serious enough to make a legal binding situation. If they want to duck an issue, and say, “Well, let us avoid an abrasive confrontation,” they can probably try this kind of language, and we have the effects thereof visited upon us in this instance. Senator A oung. I think we have been wasting a lot of time writing conference reports. SUBCO MMITTEE RECESS Chairman M cClellan. Are there any other questions? We will recess and come back at 2 o’clock. (Whereupon, at 12:25 p.m., the subcommittee was recessed, to reconvene at 2 p.m., the same day.) (A fternoon Ses sion , 2 O’ cl ock , T ues day , O ctober 21, 1975) F-18 NA VY A IR CO MBA T FIG H T E R

Nondepartmental W itnesses

STATEM ENT OF GE OR GE A. SP ANGENBERG, M cL EAN, VA .

OPP OS IT IO N TO F - 1 8 DE VE LO PM EN T

Ch airma n M cClellan. I understand th at one of my colleagues has been delayed , but we had best proceed. Our first witness is Mr. George Spa nge nbe rg. Mr. Spa ngenb erg, we welcome you to the committee, a nd I note you have a prep ared state ment. I)o you wish to read it ? Mr. S pangenberg. I do. Ch airma n M cClellan. You may proceed. Mr. S pangenberg. Mr. Chairma n, in this, my first app earanc e be­ fore you r committee af te r a c areer ded icated to nav al aviation, I find myself in the unc omfortable position of being opposed to a pro gra m which is, on the record at least, bein g supported by my forme r col­ leagues within the Navy. I t is my hope th at I can help you understand how such differences can exist and also exp lain in relatively simple terms why I believe i t would be a mistake to develop the F -18 as it is now defined. background I am pres enting my conclusions on the F-18 from a back ground of 40 years involvem ent with naval aviatio n and an intim ate know ledge of every new naval airc raft sta rte d in the las t 35 yea rs. I was directly involved in the ini tiation, justification, and source selection of every ai rc raft design now in naval service, and believe I know as well as anyone the problems encountered in the acquisition process. T do not claim to know the solu tions to all those prob lems, but I certainl y can recognize the nonsolutions proposed by many of those speculative the orists who have no actual experience in the field. I believe strongly th at each new prog ram must be justified on the bases of both cost and effectiveness, as the y have been in the past 20 years or so. A low cost pro gram which fails the effectiveness tes t is obviously no barga in, and no justificatio n exists fo r a new pro gra m such as th e proposed F -18 which flunks the effectiveness test and costs more than oth er fully defined altern atives which alread y exist. The chairman will remember my connectio n with the T FX and his inv estiga tion of th at ill-conceived and obviously mism anaged pro ject. One of the lessons I learned from th at pro gra m was tha t poo r decisions could be made by senior officials in OS D even when the y were pro vided with prop er facts. (49 ) 50

SU PP OR T DE MA NDED FOR OSD PO SI TI ON It was also ap pa rent t hat facts a t v arianc e with an OSD esta blished position often failed to reach the decisionmaker in recognizable form af ter p rog ressing u p the chain of com mand from the engineering level within the service. I also learned th at it is virtu all y impossible for Congress to obtain a fran k opinion from subordinate officers w ith in a service or any da ta from service spokesmen which does not supp ort an OSD position . In too many cases supp ort is directe d from the top under threa ts w hich to me a pp ear to be alm ost blackmail. As I recall, all Nav y spokesmen, military an d civilian, su pported the F-1 11B in a uth oriza tio n and a pp ropriatio n heari ngs f or several years, despite clear evidence ava ilab le to them th at a successful co ll u sio n was no t feasible. The Congress finally had to d ire ct ter mination o f that pro gra m allowing the Navy to escape condem nation for ins ubordin a­ tion. Often in the he aring procedure the OS D spokesman in his initial rem arks will emphasize that he has the full supp ort of the service involved, effectively stifling any show of dissent. W ith in the service, the normal ration ale used for ju stify ing these Second-rate pro gra ms which have been directed from above is that “ Anyth inir is b ett er than no thing .” Th is attitud e has been apparen t within the Navy for the last few yea rs since the completely arbi trar y decision by OSD to lim it F-14 procuremen t to abo ut ha lf th at which had been justified previously on cost and effectiveness gro und s to both OS D and th e Congress. W ith the acceptance of the OSD decision, however, every effort was ex­ pended in finding reaso nable altern atives while hop ing that even­ tually logic would prevail to reverse the decision before pro duction of the preferred models ceased. Ov era ll, the situ ation is bad an^ appears to be worsening as OS D assumes more and more of the au thority in the weapons system acquisition process.

SEAR CH FOR LOW COST AL TE RN AT IV E TO F -1 4 'fh e OS D has had what appears to lie an obsession with the search for a lower cost alt erna tiv e to the F- 14 and its weapon s v ^ m P V P r since contract ual problem s were experienced with n ’i een foun d ppnt •?' lS c *l e a Pe r than the F-14, a mu ltip urpose figh ter attack con- tnn SH&ge^ed which would serve as Ixith an F'—l and A- 7 replace- V f \ V ° n ^ r e s s a n d the OSD then combined to kill any hope th at th is i ,. c ?n eept could provide an ade quate replacem ent for these types li hf l r e - ^hat the design should lie a deriv ative o f the Air Force ’s but d hghtcr. Th is direction not only limited the com petition, ; € n d e d to constra in many of the requirements which were ulti- specified to som eth ing less th an the levels which the F-4 and < inv ent ory c urrently possess. 51

After pe rm itt ing both of the competing contr actor s con siderable and necessary leeway in devia tin g from the orig inal Air Force design, the N avy selected the McDonnell No rth rop design as the best o f those under cons ideration, d esigna ted it the F-18 , and is pr ep ar ing to pr o­ ceed with its development.

FAIR SELECTION PROCESS Altho ugh the losing contr actor in the com petition pro tested the award , th ere is no doubt in my mind but t hat the selection process itse lf was fa ir and equitab le to th at contr actor and th at indeed the best design was chosen. The source selection decision should not lie an issue, although one can certainly question the fairness of the entire procurement process when Air Force tech nology pro totypes were al ­ lowed to grow into large-scale development and pro duction p rogra ms withou t pe rm itt ing all of the indu str y to compete. One ca n also ques­ tion the adequacy of the ana lysis and justification, if any, w hich star ted the e ntire exercise. W ith some of the bac kgrou nd out of the way, let me give you my eva luation of the F-18 pro gra m, using d ata presented by the Navy in prev ious hea rings, or published in tra de jou rna ls, as my basic source of tech nica l and cost inf orm ation. I will tr y to sim pli fy the situatio n to the esse ntial ing red ien ts of wheth er the F-18 is wo rth buyin g as either a fighter or as an attack ai rc raft on the gro unds of cost and effectiveness. EVALUATION OF F -1 8 AS A FIGHTER PLANE Sta rtin g with the figh ter case, we find by interpolating the Nav y pro gra m cost and delivery da ta given in your earlier “L ightw eig ht Fi gh ter He arings,” that the first 400 airc raft will lie delivered as fighters l>etween the yea rs 1981 and 1986 at a total program acq uisi­ tion price of $5.3 billion in constan t fiscal year 1975 dolla rs. This means an average pric e of o ver $13 m illion, c ert ain ly more t ha n the average cost of an addit ion al 400 F-1 4’s over the program ed 330. If one were to extra polate from the fiscal year 1975 budget price of an F-14, using the same qu an tity /p rice relationship used fo r the F-18 , the ave rage cost of 400 addit ion al F-1 4’s would lie under $11 million. Since no one has dis puted the fact th at the F- 14 has a gre at advanta ge in capability, a normal eva luation would end at this point with the showing of g reater effectiveness at a lower acquisition cost for the F-1 4. How ever, unlike the s itu ati on in most com petitions, o pe rat­ ing costs differ between the two designs with Navy figures givin g an advanta ge o f $0.5 m illion per y ear per o pe ratin g ai rc raft to the F-1 8. If one assumed 18 squadrons of T2 airpla nes each, op erating cost savings would presum ably be 18 tim es 12 times $0.5 millio n or $108 million pe r year, thu s allowing the acquisition deficit for 400 aircr af t to be offset af te r about 8 y ears of operation s. In simple terms, then, we start, deliverin g the new fighte rs in 6 years, finish in 11. and bre ak even in total cost ab out the end of the next decade. Now for the effectiveness pa rt of the equation. Altho ugh there has been little public discussion of absolute effectiveness levels o f our vari­ ous fighters, some un de rst an ding of relative values can be gleaned from justifi cation s used by the services in star ting new prog ram s and the n c ontin uin g them. 52

IMPORTANCE OF WEAPON SYSTEM TO A FIGHTER As is well known, the ca pability of a fighter in toda y’s world is p ri ­ ma rily a fun ctio n of its weapons system and its missiles rather t ha n pure air plane performance and maneu verabi lity , although these, of course, c ann ot be com pletely ignored. Two y ears ago the Nav y testified th at the F- 14 with its multishot system and Phoen ix missiles was equ ivalent to at least thr ee F-4 ai r­ cr af t with its sing le-shot system ca rry ing Sparrow missiles again st a moderate performance bomber raid. The Congress has also received testimony that again st some of the more difficult targ ets the F-14 and Phoenix combination is infinitely better tha n the F—1 w ith its Sparr ow s since th e l atter has no chance of killin g that typ e o f th reat. To understand the imp orta nce of the weapons system and missiles to an ai rc ra ft, you should also know th at operatio nal analy sts late an F- 14 with Pho enix as twice as good as an F-14 with Sp arrow again st most targ ets in most thr ea t situation s.

CREW SIZE Two years ago Congress hea rd from the Navy that a two-man crew was necessary in its all-weather fighters in order to minimize cost effectiveness. At th at tim e OS D expressed its concurrence on the issue of crew size. You also know that more ra da r range gives greater effectiveness. Keeping these fac ts in mind, it is clear th at the rank ing of Navy fighters in overall combat effectiveness would be the F-1 4/ Phoenix first by a wide margin, the F- 14 /S pa rrow next, followed by the F-4 and then the F-1 8. The latter suffers from its one-man crew, less pow erful rad ar, and fewer missiles, which combine to offset its predicted better rel iab ility and main tainabil ity characteristics, and its b etter tur ning performance. Overall, the F-18 type of fighter would fail a normal cost effectiveness justificatio n over the F-4, a design initiate d abo ut 20 ye ars ago.

F -1 8 CAPABILITY In judg ing the capabil ity of the F-18 relative to foreign threats , one should bear in min d the tim ing of the pro gra m. The 6-year period before prod uction deliveries sta rt corresponds to t he time spent in develop ing, pro ducing, and dep loying the F-14. It is obvious th at any enemy has ample time to produce a counterattack . The enem y’s task is enorm ously simplified if he has to counter only designs such as the F- 16 or F-1 8. If he chooses, he can easily design a better dog- figh ter, since he has lesser co nstraints, a nd can thu s defeat the F-18 in the on ly are a in which anyone now claims a superio rity over the F -14 . To win in an air-to-air w ar, we must invest in be tte r weapons systems and m issiles if we are to have a chance of winning. Summ ing u p the fighte r case, the F-18 has no more capability tha n an F—1 and costs more; while it has fa r less capability than an F-14 which costs no more, and is ava ilab le yea rs ear lier. Th ere is no way in which the F- 18 can be justified as a Navy fighte r. 53

F—18 AS A -7 REPLACEMENT Hav ing shown th at bu yin g the first 400 F -1 8’s as fighters m akes no sense, let’s now consider t he second 400 a irc raft which have been pro­ posed as A-7 replacem ents. Costs in th is case fav or the A-7 both in quoted acquisition p rices an d in op erating costs. Again using the N ayv (lata for the total F- 18 program , we find the unit procurement price for the F-18 a ttack models t o be a little ov er$ 6M while the A—7 equiv­ alent price has been quoted at less tha n $4.5M. Comparable operat ing prices were quoted bv the Navy as $0.9M for the F -18 and $0.75M for the A-7. Overa ll, one sees that t he F- 18 is abo ut ha lf aga in as expensive as the A -7, to to be justifiable it sho uld have at least th at degree of supe­ riority. I t has been stated th at the F- 18 using three d rop tan ks h as a slightly lower o peratin g rad ius tha n the A -7 using tw o ta nks, t h at the weapon systems are closely com parable, bu t th at the F- 18 ’s high er combat speed reduces its vu lnera bil ity , ma kin g it a be tte r overall attack airpla ne. Unfortuna tely, the difference in payload pe r rad ius chara cte ristics of the two models is greater than imp lied by such testim ony, par­ tic ularly if the pilot actually uses his max imum pow er to achieve the claimed advanta ge in combat, performance . Ap pro xim ations of the differences in operati ng rad ii with the same bomb load and with the same number of extern al tan ks show th at the A-7 outranges the F -18 by about 150 miles when the pilot of th e la tter does not use his pote n­ tial speed advanta ge and by about 250 miles when he does. Th e F- 18 does not appro ach the GOO-mile radius on intern al fuel with six 250 pou nd bombs, which was one of the requirements in the origi nal A- 7 com petition in 1973, n or does it match the 750-mile strik e radius with external fuel estimated for the F-4 early in its developm ent. To the un initiated, th e atta ck ra diu s quoted for the F- 18 sounds n ot unr eas on­ able, until one realizes th at max imum external fuel is used on the least dema nding fo r the many att ack radius problem s which exist. It s tru e ran ge chara cte ristics can be tte r be gauged by notin g th at it is inferio r on intern al fuel and witho ut combat power usage to wh at was initially estimated for the A—4 in 1952. To con tinu e this line of logic, it will be recalled th at the A- 7 was ju stified some 10 years la ter in pa rt b y the fact th at its c apability was twice th at o f the A—4. and th at th at level of capability was needed. Altho ugh there are other deficiencies in the design as it h as been reported, its ran ge performance alone is sufficient to disqualify it fo r serious con sideration as an A- 7 replacemen t. W ith a 50-percent high er price and a 50-percent lower capability than the A-7, the F- 18 can not be justified as an attack airpla ne. F -1 8 AS A REC ONN AISS ANC E PLAN E In previous heari ng s the poten tial use of the F- 18 as a reconnais­ sance type has also been claim ed. It s range deficiency would ap pe ar to rule out its use in this role, which nor mally requires greater ran ge than fo r the fighte r and att ack models fo r which it is doing the reconnaissance. 54

Somewhat as an aside, T migh t sta te th at it is probable th at the logic used for the F-1 4/F -1 8 choice would ca rry over to the F-1 5/ F-16 issue, although with no cutb ack yet required of planne d F- 15 procure men t to accommodate the F- 16 , the problem is less critical to the Air Force. In your earlier hearings, the Air F orc e showed equal cost forces to be 650 F- 16 ’s or 520 F- 15 ’s, inc lud ing a 5-year op erating period. If the F-15 is worth bu ying a t all, its c apabilities must easily offset the small numerical advanta ge noted.

F —18 NOT COST-EFFECM TVE IN E IT H ER ROL E Sum marizing , it is clear th at the F- 18 is n either effective, no r cost effective, in either f igh ter or attack roles. It is vastly inferio r in capa­ bil ity to the F- 14 at abou t the same total cost, somewhat less capab le and conside rably more expensive than the F-4 and is inadeq uate in ran ge and more costly than the A-7. The F- 18 would have failed to survive any of the cost effectiveness s tudies c onducted by the Nav y in seeking F-4 and A-4 replacemen ts in the las t 15 years. Th ere is no justification for continuing the program . Fu nd s now pla nned for the F-18 should be redirec ted to first in ­ crease and then hold F-14 pro duction at a reasonably efficient level, thu s solv ing the Nav y figh ter gap problem. Stud y work and com­ ponent development should also be sta rte d on an adequate replace­ men t for the A-7 when that becomes necessary. The Navy’s goal of reducing ca rrier typ es is achievable with a mix of F- 14 ’s and A-7’s fa r easier, at less cost, and with a greater level of capability than with a mix of F-1 4’s and F -18’s.

RATIONALE OF HI GH -LOW M IX CONCEPT The question has been raised as to how the lig htwe igh t fighte r pro­ gra m man aged to obtain so much supp ort in view of the cost and effectiveness arg um ents aga inst it. In large measure, it seems to me th at th e b asic problem lies w ith those w ho propose simplis tic solu tions to very difficult problems. In this case the OS D proposed high -low mix concept w as the culpr it. It was assum ed, witho ut proof, first t hat we could not afford all the first-line weapons we needed and the n assumed, again witho ut proof, th at buyin g a mix of first-line and second-line weapons would cost less t ha n all first line. A prim ary goal in the lightweig ht fighte r prog ram seems to be to “p rove” th is concept, by for cin g a mix of F-1 5/ F-1 6 on the Air For ce, and F-1 4/F -1 8 on the Navy. Actua lly, the vir tue of a mix of equ ipm ent has lon g been know n and practic ed in both military and indu str ial circles but only when it made sense to do so. In the case of an ai rc ra ft ca rrier, fo r exam ple, a mix of high pric e and hig h capabil ity F- 14 ’s with the lower priced A-7 ’s could be considered a rea listic implementation of the high /lo w mix theory . It is cle ar th at each case needs to be exam­ ined on its own merits, with cost and effectiveness both considered. Th ere has been much talk by OS D of solving the problem of our num erical in ferio rit y to the th re at by th e lig htwe igh t fighter pr ogram 55 and the high-low mix concept, but the figures to date belie the rhe toric. It seems clear to me th at C N ) should reexam ine its policies and ad op t ontv those which give us some chance of winning. Tha t completes my prepared sta tem ent. I will be glad to answer any questions. ■ Chairma n M cClellan. Th an k you very much, Mr. Spangenberg . I tak e it you th ink the re is very little in the F—18 as a weapon?

P -1 8 OUTMODED WEA PON

Mr. S pangenberg1. That is rig ht, sir. Aotunlly, Senator, it is a good air plan e in its field, bu t the field was passed by 15 yea rs ago. It is th at kind of airpla ne. I f we were star ting an airplane in 1952, I th in k we could make a case fo r the F-18. Ch airma n M cClellan. Are you sayin g the proposed F- 18 is no t a pla ne with the advanced qualities needed in the 1980’s, th at it fits back into a no the r perio d ? Mr. S pangenberg. Yes, sir. Ch air ma n M cClellan. In yo ur opin ion, i t will be in ade quate in th e futur e? Mr. S pangenberg. Yes, sir, Chairma n M cClellan. Ear lier in your statement you said , “ A low­ cost prog ram which fai ls the effectiveness te st is obviously no barga in.” IIow does the F- 18 fail the effectiveness test? Mr. S pangenberg. In order to be worth b uying , the a irp lane should be capable of defeati ng the t hre at as it ha s been defined.

F -1 8 CAN NOT DEFEAT PRO JECTED TH RE AT IN 1 9 8 0 ’s Since the late 1950’s, it. has been the position of the Navy th at the equ ivalent capability to th at which we finally hav e in service today as th» 7-1 4 is the level of capabil ity th at is needed. As I see situatio n, the F-18 , ove rall, would be som ewh at less effective than our F-4 inv ent ory , at least as analyzed by naval opera tional analysts. Th e prog ram to replace F -4 ’s actua lly sta rte d with the Eag le / missileer prog ram in the late 1950’s; the n we were forced into the T F X pro gra m, again justi fying th at app roa ch over wha t was the n the F-4 and again st the known threat. We aga in wen t throug h the justification process in the l ate 1960’s when we changed from a T FX , and its V FA X complem ent, to the pro gra m which became the F-14. I don’t th in k th at the F-18 will handle the kin d of th re at we are liable to see in the next decade. Ch air ma n M cClellan. Wo uld you say th at the exp ertise in the Defense De partm ent, and in the Navy De partm ent, should be able to recognize th is fact? Mr. S pangenberg. It certainly should. Ch airma n M cClellan. Y ou spoke of th e T F X -lllB which is s up­ posed to be a Navy pla ne ? Mr. S pangenberg. Right. 56

Chairman McClellan. Has the Navy ever secured a substitute for th eF-l llB ? Mr. Spangenberg. The F-14 is really the substitute for that aircraft. Chairman M cClellan. The F-14 was a plane tha t the Navy pro­ cured instead of the F-111B ? Mr. Spangenberg. Right.

SITUATION SIMILAR TO TFX CONSIDERATION Chairman M cClellan. We both know some of the reasons that program failed. You referred to some things today that I think were revealed in consideration of the TF X : similarly: I also learned that it is virtually impossible for Congress to obtain a frank opinion from subordinate officers within a service or any data from service spokesmen which does not support an OSD position. I think that was absolutely and literally time in connection with the TF X program. Are you saying tha t situation has now carried over into the present ? Mr. Spangenberg. Yes, sir. Chairman M cClellan. When did you leave the Navy? Mr. Spangenberg. 1973. Chairman McClellan. Just 2 years ago. Are you contending that this situation exists today with reference to the F-18, tha t subordinate officials in the Department are not permitted to state their honest opinions to congressional committees with respect to the merits of this and other programs? Mr. Spangenberg. I think that is my feeling, yes. I have talked to too many people at the lower working levels who feel exactly as I do on their program. Chairman M cClellan. Y ou further state, “In too many cases, support is directed from the top under threats which to me appear to be almost blackmail.” Have you had that experience in the Navy ? Mr. Spangenberg. I have been in meetings, from the TFX days on, in which that type of threat appeared. The type of thing, “You take this or you get nothing.” “If you don’t take this, we will cut back the carrier program, or we will cut back the shipbuilding program.” Chairman McClellan. Do you regard that as a form of coercion ? Mr. Spangenberg. Certainly.

STIFLING OF DISSENT

Chairman M cClellan. Y ou go on to say, “Often, in the hearing procedure, the OSD spokesman in his initial remarks will emphasize that he has the full support of the service involved, effectively stifling any show of dissent.” Do you have any reason to believe that situation prevails now in connection with the F-18 ? Mr. Spangenberg. I really believe it does, yes, sir. Chairman M cClellan. Y ou mentioned a moment ago that sub­ ordinates are placed in a position where they have to realize that anything is better than nothing. 57

You fu rther stated, “T his attit ud e has been ap pa rent within the Nav y for the last few yea rs, since the completely ar bi trar y decision by OS D to lim it F-14 procurement to abou t ha lf of th at which had been justified previously on cost effectiveness gro unds to both OSD and th e Congress.” Why do you have such ap pa rent pa rtialit y tow ard the F-14 ? Do you hav e any connection in any way with the producer of the F-14? Mr. S pangenberg. N o, sir. 1 have talked to the pro ducer of the F-14. I have been, obviously, fri ends with many of the people in Gru mm an and in McDonnell Douglas, and in S iko rsky, and all throu gh the in du str y. I have nev er been connected in any way financially with Gru mm an. Cha irm an M cClellan. L et ’s carry t his j ust a little furth er.

FI NAL RESPONSIB ILITY OF DECISIO N-MA KING Do we not recognize th at in the Defense De partm ent, as in any agency or functio nin g of the Gov ernment, there has to be some place where the decision is made, where th e responsibility finally rests. I think you mu st agree th at th ere mu st be some measure o f discipline— not th e stiflin g o f opinions, b ut someplace where the final decision has to be made. Is th at not rea lly the process th at goes on in ma kin g these decisions ? Mr. S pangenberg. Yes, sir. I think I am really question ing t hough wheth er or n ot the military has sufficient, voice Defore the decision is made, a nd I am worried th at many of the decisions are be ing made by people th at I consider ran k am ate urs in the total weapon acquisition process. I don’t believe th at t he military, in fact, get the fa ir shake in the whole bu dg et process. The Congress never hea rs the position which is gen era ted wi thin the Nav y, so they have no recourse really. The only recourse comes in the way of lea kin g data to a staff of the congres ­ sional com mittee so you can ask questions and tr y to break out the tru e facts. Chairma n M cClellan. W ell, if I understand wha t you are saying, once the decision is m ade at th e final level of au thority , then absolute loy alty and acquiescence is exacted from all sub ordinates. Is that wh at you are sayin g ? Mr. S pangenberg. Yes. Ch airma n M cC lellan. I t’s the typ e of situation where neither extreme is desirable . I f people cann ot feel free to come before Congress and express th ei r hon est opinion, how can we hope to evaluate a program ? On the oth er hand, if the De partm ent can com mand no loy alty—a nd there are opponen ts to every program —we would have no thing bu t chaos. It is difficult to arriv e at the m iddle gro und. You hav e been down there a long time , and you just left the re recently, 2 years a go ?

POWER IN THE ACQU ISIT ION PROCESS

Mr. S pangenberg. Yes, sir. The pow er in the acquisition process is going more and more to the top of OS D, and the job of the guy at the top of OS D is just too bro ad for him to get into the details of all of the pro gram s th at are going on. 58

T had trouble enough doing my pa rt of the job, but I think th at 1 was in a fa r better position to make a com petitive decision on who should be selected from a weapons system than the Secre tar y of Defense, who had never seen a proposal, and knew only th at about the program which was told him. If he did n ot concur with me basically it was because I had done a lousy job in makin g a presen tation to him ra th er t ha n he had sup erior knowledge on a pa rti cu lar pro gram. Chairma n McClellan. An oth er section of your statem ent reads, “The source selection decision should not lx1 an issue, a lthough one can cer tainly questio n the fairness o f t he en tire procure men t process when Ai r Force tech nology pro totypes were allowed to grow into large-scale development and pro duction pro gra ms with out pe rm itting all of the ind ustry to com pete.” You fu rthe r sta ted , “One can also question the adequacy of the ana lysis and justificatio n, if any, which sta rte d the entire exercise." What do you mean by t ha t ? Amp lify it for us.

EVOLUTION OF LIGH TW EIGH T FIG HTER PROGRAM

Mr. Spangenberg. Well, this star ts back in the his tor y of how the lig htwe igh t fighter pro gram got sta rte d. It was really by dire ctio n of OSD . A decision was made th at the re were inadequate fun ds going to be made availab le so we had to reduce the cost of programs. The assumptio n was made that this high /lo w mix would solve, in pa rt, the problem. Tha t by proto typing we would get more altern atives and have more options for the future and th at by havin g pro totypes we would reduce the costs of production. One can question almost every assumption made in that list. When the decision was finally made to go ahead with proto typ e pro gra ms , the Air Force assembled a larg e stu dy gro up and laid out a serie s of pro gra ms which might make sense for them to pro toty pe. The Navy did the same thin g some time later. One of the pro gra ms selected by OS D was the Air Force lig ht ­ weight fighter prog ram . T here was no show ing at the time th at a ligh t­ weight fighter would, in fact, be a worthwhile, cost effective solution to any known Air Force prob lem. Actua lly, thi s typ e of a LW F pro gra m, of course, must have been considered by the Air Force when they justified the F-15 in t he first place. The Navy had c ertain ly worried about or considered the pos sibility of lig htwe igh t fighters as bein g a solution. I don't think th at there was any justification at the begin nin g of the pro gra m to show that lig htwe igh t fighters in fact were going to solve any proble ms

AIR FORCE SELECTION OF DESIGNS The Air Force advertised to the indu str y that they were going to build two lightw eig ht pro totypes, but with no conside ration for pro­ duction. They got bids, as I reca ll, from General Dynamics, Boeing, LT V, Lockheed, and No rth rop . They selected the General Dyn amics design as the win ner of the com pet ition, and in second place, rum or has it, was other tha n the No rth rop design until the decision got to Wash ing ton , when No rth rop became th e second choice. Th ere was some 59 logic to that. It was a d ifferent typ e of a irp lan e, the o nly twin engine air plane in the competition. They were going to fly off the F- 16 versus the F-17, aga in techn ology prototy pes. If they ever said they were going to be com petitive with a F-15, I imagine th at the Congress would have cut back on procurement of F- 15 ’s. I would have if I had been there. So it was car efu lly sta ted these were only to be developed as tech­ nology proto typ e planes. Ch air ma n McClellan. Y ou d on 't think that both the F-16 and the F-18 are needed? Mr. S panoenbero. I d on't believe either is needed. Ch airma n M cClellan. Ne ither o f them ? Mr. Spanoenbero. That is correct. Ch airma n McClellan. In oth er words, the existing planes you mentioned here are adequate to perform the missions that the F-16 and th e F-18 are inten ded to perf orm ? Mr. Spanoenbero. Th at is righ t. Ch airma n McClellan. All rig ht. You ind icated th at the Nav y has always insisted on a two-man plane, is that correct ?

NAVY INSIST EN CE ON TW O-EN GINE PLA NES

Mr. Spanoenbero. We had since the late fifties. We made the de­ cision between the F8 U-3 and the F-4 pro grams, largely on the basis th at the two-man crew was going to win the war against the one-man crew airpla ne. Ever since th at time, the Navy, on the basis of every Navy study I know of, justified the two-man crew. Ch air ma n McClellan. Wh en you were comp aring the F-18 , you said, “The la tter suffers from its one-man crew, less pow erful rad ar, and fewer missiles, which combine to offset its predicte d b ett er reliabil ­ ity and main tai nabil ity charac ter istics .'' In that statem ent, you are com paring the F-18 to wh at plane? Mr. S panoenbero. Well, relative to the F-4. And the same sta te­ ments apply to the F-1 4. Pr im arily , the reason why, in m y opinion , the F- 18 on an overall effectiveness sta ndpoint , was inferio r slightly to the F-14.

F -1 8 ADVANTAGES OVER F -4

Ch air man McClellan. Are there any a reas w here t he F-18 has a d­ van tages over the F- 4? You've shown us three are as where you con­ sider it to be inferior. Mr. Spanoenbero. Yes, sir. It has hig her excess th ru st, and lower win g loading, so it will tu rn better, and at lower speeds, and will lx* able to main tai n rates of climb b etter th an the F -4. Now, this would lie tru e from low subsonic to medium supersonic area. In the high superso nic areas, the F- 4 would be bette r than the F-1 8. Ch air man McClellan. So the re are some benefits ? Mr. S panoenbero. Yes, sir. Ch air man McClellan. B ut on the whole you think the F- 18 comes out second best? Mr. Spanoenbero. Yes, sir. 60

F—18 AS A “ IX XI FI GI IT ER ” You also stated , “ If he chooses, he can easily design a better dog- fighter since he has lesser constrain ts and can thus d efeat the F-18 in the only area in which anyone now claims its superio rity over the F-14 .” You are talking about the enemy ? Mr. S pangenbero. Right. Chairman M cClellan. W hat do you mean by “lesser constra int s” ? Mr. S pangenbero. Gen erally speaking, or really, in every case, the U.S. designed figh ter will have a greater fuel load than that required by the pur ely defensive fighter. Since we have a greater fuel load to c arr y, our a irp lane is g oing to weigh more th an the enemy airpla ne. Assuming the same state of the art in both air pla ne and engine designs, it is obvious then that he can design an air pla ne th at is ligh ter than our airplane and will, the ref ore , hav e hig her performance than our airplane. You can also assume he will be opera tin g in an overall comm and and control environmen t which is favorable to him, so he has tha t advanta ge going for him. Chairma n M cClellan. Y ou followed that by s aying, “T o win in an air-to-air war, we must invest in be tte r weapons systems and missiles if we are to have a chance of win ning.” I tho ught I had understood you to say th at we did not need to invest in bette r planes, that the F-14 and F-1 5 and F- 4 are all ade ­ quate. I s th at not what you said?

F -4 REP LA CEM EN T NE EDED

Mr. S pangenbero. I am say ing we don't have to design a superior dogfigh ter in selecting a new weapons system s because we can solve the problem in anoth er wav. In oth er words, shoot at longer range than he does. I think that is the only way we can, using physical facts, “win the wa r.” I don't believe th at the F-4 would be an adequate air ­ plane 10 yea rs from now by an y means. Ch airma n M cClellan. But you do consider it adequate at this time—you do not think it needs replacem ent ? Mr. S pangenbero. I thi nk t ha t it does need replacement. It is b eing replaced by the F-14. I think th at we should be star tin g on a better missile an d weapons system to outfit th e followon to an F-14. Certainl y the enemy knows wh at the F- 14 can do. Th at capability, you will remember, was the cap ability th at we had in the F - lll, and it was 1961 when we star ted that. So t he technology, kind of know ledge th at is in the F -14 system today is that which was available 14 years ago. Chairma n M cClellan. At th at time we were tryi ng to build a two- man plane and we ha d the fatal problem in connection with the TFX , as I recall. Mr. S pangenbero. It was technically impossible to meet the diverse requirements. Ch airma n M cClellan. I remember in that instance the Navy kept con tendin g in public hea rings th at they wanted it and needed it. Bu t corresponden ce a fter tha t stopped , because they were saying behind the scenes they knew it was not any good and would never work. 61 May I quote again: The F-18 does not approach the 600 mile radius on internal fuel with six 250 pound bombs, which was one of the requirements in the original A-7 competi­ tion in 1963, nor does it match the 750-mile strike radius with external fuel estimated for the F—1 early in its development. What is your reason for that statement? Mr. Spangenberg. I was trying to show the capability level of an attack version of the F-18, that it is fa r less than had been predicted for these other programs when we started them. I f we are asking for less today, it is a cinch we will end up with a considerably lesser capability when the attack version of the F-18 gets to the fleet. Chairman McClellan. You are saying, then, that we could build a better plane if we applied all the technology—all the knowledge— that we have today ? Mr. Spangenberg. I am sure we could build a better plane. I am not saying it would, or should, be a lighter plane than A-18, nor tha t it would cost less than an A-18. I think to be useful in the future, it is just going to have to cost more than the airplane it replaces. Chairman McClellan. You also stated: Although there are other deficiencies in the design as it has been reported, its range performance alone is sufficient to disqualify it for serious consideration as an A-7 replacement. Does that remark refer to the F-18 ? Mr. Spangenberg. Right. Chairman McClellan. Could you give us a little more detail on that, please ? F -1 8 ( A -1 8 ) RANG E

Mr. Spangenberg. Well, I am talking primarily of how far it will go. Chairman McClellan. How does it compare with the A-7? Mr. Spangenberg. Just roughly half the A-7. On internal fuel, tha t is. Now the reason I used internal fuel as a measure of goodness in an airplane, is tha t we went through a cycle many years ago of allowing our designers to count on using external fuel tanks to meet normal day- in day-out operating requirements. To achieve the kind of combat performance you need, it then means you must drop those tanks. In the case of the F-18, it means that we will be dropping from two to three of the 600-gallon tanks on every mission if we want the kind of per­ formance quoted for the airplane. Chairman McClellan. In other words, in order to get the maximum weaponry out of it in combat, the F-18 has to drop gas tanks to give it the lighter effect needed for better performance ? Mr. Spangenberg. That is right. Chairman McClellan. Then you follow on and say: With a 50 percent higher price and a 50 percent lower capability tha n the A-7, the F-18 cannot be justified as an a ttack airplane. Is that what you were speaking of with respect to the external fuel? Mr. Spangenberg. Yes, sir. The external fuel question is but one part of the problem. My overall conclusion you have quoted correctly. Chairman McClellan. Senator Young, any questions?

60-913 0 - 75 - 5 62

Senator Y oung. I have o nly one or two. I am taki ng this a bit out of contex t, but you say : If the F-15 is worth buying at all, its capability must easily offset the small numerical advantage noted. F - 1 5 CA PA BIL IT Y W ha t do you th ink of the F-15 as a plane, its ca pability ? How would you r ate it ? Mr. S pangenberg. I think 1 would ask you “compared to wh at?’’ I think pro bably fo r th e Air Forc e mission it is a be tte r a irp lane than the F -4 . I think that the Air Force rea lly needs the capability th at is in the F-14. I know that th ere are th reats that the F-15 c ann ot han dle that the F-14 can handle. I am sorry th at the F-15 does not have the capability of the F-14. But I would certainly rate the F-15 as worth buyin g relative to the F- 16 or the 17, or the 18. Senator Y oung. How would you compare it with the F-4 ? Mr. S pangenberg. I would have tr ou ble j ustif ying i t using th e type of cost effectiveness analyses I have seen over the years. How ever, the Air Force did j ustif y it in th eir own cost effectiveness analyses, which I have no way of really cri tiquin g. I would accept th is ana lysis th at it is a bette r deal for them than the F- 4.

pilots’ views of F - 1 5

Se na tor Y oung. You said a while ago th at we should go to th e pilots and those t hat are at the working level to ge t th e apprais al of a plane and pay more attention to them . In the las t week I flew the F-15 at Luke A ir Force Base, an d I visited seven or eight of the pilo ts, and they said if th ey had th ei r choice th ey would rathe r fly th e F -15 for no thing than to be p aid to fly the F- 4. Mr. S pangenberg. I would e xpect them to say that. Senator Y oung. They are the ones that fly it and they are the ones th at do the fighting. I think all of the people I talked with were fighter pi lots back from th e Vietn am w ar. Have you ever had any experience as a pilot ? Mr. S pangenberg. No, sir. Se nator Y oung. I have no f ur th er questions. Ch airma n M cClellan. Sena tor Inouve.

F - 4 / F - 1 4 / F - 1 8 CO MPA RISO NS

Senator I nouve. Th rou ghout you r statem ent, it speaks of the effec­ tiveness, capability, of the F-4 , F- 14 , and F-18 against the enemy. How would the F-18 stand up again st the Foxbat? Mr. S pangenberg. Tt would be useless. Senator I nouye. Against the Flog ger. Mr. S pangenberg. If you got into a close-in tu rn in g engagem ent, the F-18 would probab ly beat the Flo gger. It depends upon wh at you as­ sume is th e long -range missile capabil ity of F logg er as to wh eth er you win or lose the long-rang e engagement. Senator I nouye. How about the Fe nce r? Mr. S pangenberg. The Fencer is pro bab ly less cap able th an the Flo gger, as I remember it. It would be the same typ e of th in g; close in the F -18 would win and long-range it is ha rd to say what the Soviets 63 are going: to be doing in the time period of the mid-eighty's. They certainly have the capability of outranging an F-18 kind of airplane. Senator I noute. How would the F-14 fare against the Foxbat? Mr. Spangenberg. The F-14 can handle the Foxbat, which is one of the design threats for which it was designed. Senator I noute. And the others I named ? Mr. Spangenberg. It would beat those also in long-range engage­ ments, which is the only way we have ever been able to see we could win. Senator I noute. How would the F-4 fare against the Foxbat? Mr. Spangenberg. The F-4 cannot handle the Foxbat. Senator I nouye. Can it handle the Flogger? Mr. S pangenberg. It is in the same class as the F-18 overall. Senator I noute. I have here statistics which were furnished to me and I would like your thoughts on it. Just comparing the F-18 with the F-4, A-7, and the F-14, accord­ ing to this statement the F-18 is 20 percent slower than the F-4. Would that be correct ? Mr. Spangenberg. It sounds about right. Senator I noute. The F-18 is 31 percent slower than the comparable Russian type ? Mr. Spangenberg. That is right. Senator I noute. The F-18 is 30 percent less lethal range of the F-4 replacement ? Mr. Spangenberg. I presume they are talking in tha t specifically to the capability of the missile with a lesser ra dar system, so that its effective missile range is low. I f that is what they mean, yes. Senator I noute. The F-18 has the same weapons which the F-4 has? Mr. Spangenberg. Yes. Senator I noute. The F-18 is 10 percent heavier than the A-7? Mr. Spangenberg. It is right around the range. In this case, you are undoubtedly talking empty weight as opposed to some of the other takeoff weights that have been quoted. Senator I noute. The F-18 is 40 percent more maneuverable than the A-7 ? Mr. Spangenberg. By “maneuverable,” if tha t means sustained turns, yes. Senator I noute. The F-18 would carry 30 to 50 percent less payload than the A-7 ? Mr. Spangenberg. At a given range, that is right. Senator I noute. The F-18 is 31 percent slower than the F-14? Mr. Spangenberg. Yes; maximum speed, yes. Senator I noute. That it has 31 percent less payload than the 14? Mr. Spangenberg. That is probably true, yes, sir. Senator I noute. That is has 25 percent less weaponry than the F-14? Mr. Spangenberg. Yes.sir, about. Senator I noute. And 50 percent less lethal range than the 14? Mr. Spangenberg. Yes. Again that is presumably referring to a respective range at which you would fire its missiles. Senator I noute. The F-18 has 75 percent less surveillance capabil­ ity than the F-14? 64

Air. Spanoenberg. I presume you mean rad ar volume, and th at would be the o rder o f magnitude, yes. Senator I nouye. Tha t the F -18 is 10 percent smaller in len gth t ha n the F-14 ? Mr. S panoenberg. Yes. Senator I nouye. Tha t the F- 18 is 14 percent more man euverab le at cer tain subsonic speeds tha n the F- 14 ? Mr. Spanoenberg. Sure.

IMPORTANCE OF MANEUVERABILITY

Senator I nouye. H ow importa nt is maneu verabi lity ? Because I note from these sta tistics th at the F- 18 is much more maneuvera ble than the A-7 or the F-14 . Mr. S panoenberg. W ell, this comes down to the dogfighting days. In a long-rang e Pho enix engagemen t or a Sparr ow engagement—th e importance of the k ind of mane uverability th at is quoted in these nu m­ bers is virtu ally nonexistent. Any of the airpla nes have sufficient maneu verabi lity to launch Sparr ow s or Pho enix and fly the typ e of attack for which the airpla nes were designed. If you get into a close-in dogfigh t, then you want all of the maneu­ verab ility you can get. Sustaine d turn in g performance is one of the param ete rs involved in which you would like to have an adv antage. You would also like to have an advanta ge in instan taneou s tur ns, where the speed bleeds off, so th at you can still have a shorter radius of t urn. Senator I nouye. It has been suggested that the prime functio n or only function of the F -1 4 is to be completely defensive. Is th at correct?

“ PRIM E FU N C T IO N ” OF F - 1 8

Mr. S panoenberg. I th in k th at is a prepostero us statem ent. The fac tors which make the F _ 14 good in fleet defense also makes it good in beachhead defense and make it good for mainta ining ai r s uperiori ty anywhere in the world, as when it is used in an escort role, or oth er “fighter” roles. Any time you can outrange the enemy and keep tra ck o f more than one of the enemy at one time, it seems to me t ha t you have a tremen­ dous advanta ge over the short er- ran ge, virtu ally blind arrangeme nt th at you would have in our cu rre nt F-4 kind of fighter. In th at case, once you are engaged, you can see only the tar ge t you are sho oting at until the missile hits. In the case of an F-14 type of capabil ity , you cannot only see tha t t arg et but you can see ev ery thing else th at is going on. So you have an awarene ss advanta ge and in addition you have a system that outreaches the o ther guy bv 50 percent or so and then you have missiles tha t have a high er k ill capability per missile. It is hard to see why anyone who is g oin g to fight a war wou ldn’t want an F-14 type of cap ability with a Phoenix missile. It should beat a Sparrow every time. annual operating costs OF F - 1 4 AN D F - 1 8

Senator I nouye. Th e Navy told the Congress that the ann ual aver­ age op erating cost of the F-14 appro xim ate s $1,400,000? Mr. S panoenberg. Yes. Senator I nouye. And the F-18 would be approx imate ly $872,000? 65

Mr. Spangenberg. Yes. Senator I nouye. I s this element important in selecting a plane? Mr. Spangenberg. Sure, it is important. You always prefer to have a low operating cost just as you would rather have a low acquisition cost. But it does not make any sense to buy a lower operating cost air­ plane if it ends up not being able to do the mission that is required. If you can’t handle the threat—there are lots of airplanes around the country th at would have a lower operating cost than F-18. Senator I nouye. Your conclusion, then, is that, considering all of the elements, the F—I is a much better aircraft than the F-18? Mr. Spangenberg. No, sir, not a much better airplane. Overall, I think today I would buy F -4’s rather than F-18’s, only because they are cheaper and have roughly the same level of capability. Senator I nouye But between the F-14 and the F-18, as far as you are concerned, there is no comparison ? Mr. Spangenberg. There is no comparison. It is a different ball game. Senator Inouye. Thank you.

MR. SPANGENBERG’s PRESENT WORK STATUS

Chairman McClellan. Since you left the Navy, have you since been employed by any defense industry ? Mr. Spangenberg. In the last 2 years, I have had a consulting agree­ ment with the Navy. I have had ad hoc type consulting agreements with Sikorsky Airc raft and I am a member of their advisory committee. Chairman McClellan. With whom ? Mr. Spangenberg. Sikorsky Aircraft. I have had a similar type of ad hoc consulting agreement with Boeing. I consulted with Boeing on ASW (anti-submarine warfare) matters and consulted with Boeing on what is called the COI) program. 1 do not have any contractual relationships, nor have I received any money from any of the other aircraft contractors. I do have contacts with others; I talk with them but I am not paid by them. Chairman McClellan. You are not, then, retained or regularly employed by any ? Mr. Spangenberg. That is correct. Chairman McClellan. Are you a regular consultant of the Navy? Mr. Spangenberg. No, sir. I am also on an ad hoc basis for them. Chairman McClellan. So all of the work for which you receive com­ pensation is on an ad hoc relationship, is that correct ? Mr. Spangenberg. That is right. Chairman McClellan. Whether it is an airplane company or the Government ? Mr. Spangenberg. Y e s.

NAVY IN FL UE NC E ON MR. SPANGENBERG*S VIEW’S

Chairman McClellan. All right. May I ask you if you have con­ ferred with experienced combat pilots and taken into account their opinion when you state tha t the F-18 is a markedly inferior fighter aircraft to the F-14 ? Mr. Spangenberg. Yes, sir. 66

Chairma n M cClellan. Are your statem ents here based sim ply upon your own knowledge and jud gment, or does your testimony also en ­ compass opinion s you have received from oth ers who are knowledge­ able in this field, p artic ularly experienced pilots? Mr. S pangenberg. All of my opera tional knowledge of the Navy conies from talking to Navy flyers. Chairma n M cClellan. Navy flyers ? Mr. S pangenberg. Yes. 1 have been involved with them over the years. I think you shou ld realize th at every Navy flyer has a slightly different bac kgroun d, and anyone who was in the position which I was in had to eva luate the total experien ce of the man who was ta lk ­ ing to you and wheth er or not he had total know ledge or whe ther he had partic ular knowledge on th e pa rti cu lar subject being discussed. 1 think, overall, I have been the spokesman of Nav al aviation for the man in uniform th at couldn't talk up when I could. I have been in many situations where I could tal k and a you nge r officer in blue could not talk. And I was shoved forw ard and said, “Go tell him, George.” I think , in gen eral, I speak for most of the naval aviation in the statem ent I made here. I thi nk that the re are, obviously, some people th at disa gree with me. I do n't take any issue with their sincerity. I believe th at they are wrong. I do n't believe th at their knowledge is great enough of all the things th at we have done wro ng in the past, to satisfy the future . I think we have made enough mistakes. 1 have seen cases where we said, “We can’t take the next step forward because it costs too much.” But the step had to be taken lat er at an even greater cost. I can recall very well the first mistake I made in naval aviation was believing an officer who told me the FA I’ Corsair, which weighed twice as much as the F-4 F Wildcat, would never see service use. It would weigh too much, cost too much and it was twice as big. Ob­ viously, we are fo ur times tha t size today. I can recall Admiral Mitscher say ing t hat the 15,000-pound origin al F -F proposal was entire ly too big to be operating on an air craft carrier. Th is typ e of comment was prov ed ridiculo us. You have to discount th at typ e of advice even from experienced naval aviators. Fo rtu na tely, there were oth er ex­ perienced av iators who saw the p roblem more clearly. Ch airma n M cClellan. Very well. Any fu rthe r questions IxTore we answer the quorum call ?

REDIRECTION OF F -1 8 FUNDS TO PURCHASE OF F - l l ’s

Senator I nouye. Si r, you sta ted th at fund s now planne d for the F-18 should lie- redirected to first increase and then h old F-14 p roduc­ tion at a reaso nably efficient level. What is a reas ona bly efficient level ? Mr. S pangenberg. W e should lie buying them at not less than the rate we initially pla nned, which was eight per month. It is very discou rag ing to those of us th at were involved in th e o rigina l justifi ca­ tion of the pro gram to see that the num bers th at are now being quoted as overr un, which are not rea lly ove rruns, but rather in­ creases in unit costs associated with low pro duction rates. 67

The ra te of the airp lan e has been cut to about a four- per-m onth level, one ha lf o f the rate that it should have been at and one ha lf the rate th at we initia lly priced the program out on. In the futur e, OS I) has cut it back to where it is down to two and thr ee a mon th. Now, that is a very expensive way to buy airpla nes. Senator I nouye. The u nit cost, overa ll ? Mr. Spanoenberg. Abso lutely. One of the real prob lems in F-14 tot al cost pic tur e is the fact that we were forced to cut back by OS D to inefficient levels of production. Th is is still going on. Senator I nouye. S o, by rea ching an efficient level, you are spe aking of eight ? Mr. Spanoenberg. Eig ht to ten a month is what we shou ld be buying. Se nator I nouye. Thank you, ve ry much. Ch airma n McClellan. I have one other question befo re you leave. Do you have any financial interest or financial investm ent in any of the airplan e companies? Mr. S panoenberg. No, sir. Ch airma n McC lellan. T hank von very much. We appre cia te your ap pearing today. Your testimony has been most intere sting.

DEPA RTM ENT OF D E FEN SE

Office of the Deputy Secretary

STATEM ENT OF HO N. W IL L IA M P. CLE M EN TS , D EPU TY SECRETARY OF D EFEN SE

FUNDAM ENTAL REQUIR EM EN TS FOR F -1 8

Ch airma n McClellan. Our next witness is the Deputy Secre tary of Defense, Secre tary Clements. I see you have a pr epared statem ent. You m ay proceed. Mr. Clements. Mr. Ch air man and mem bers of the committee, I lielieve it is time fo r some plain talk on the F-1 8. There have been man y hea rings, lots of contract or-generated da ta, opinion af te r opinion on perform anc e and military r equ irem ents, man y self-inte rest claim s and emotional appeals^ and complex financial analyse s in which param ete rs are jug gle d to prove variou s points. All in all, I believe t ha t a s tra ightfo rw ard pro gra m with very c lear objectives ha s become complicated and confus ing to some—and maybe th at’s what some people wa nt. So now is the time to strip away this confusion, to get back to fun dame nta ls and add ress the issues in simple term s. I believe the issues are th es e: 1. Is th ere a valid militar y need and does the capability of the F-18 satisfy this need ? 2. W ha t is its cost and does it save enough tax pa ye rs’ money to justify the investment? 3. Does Con gress really support the effort in IX )I) to pursue new avenues for ach ieving greater military capabil ity at lower cost? Mr. Chairma n, I would like to address each of these questions briefly and simply. First —as to the need for the F-18 and its military value. Ju st as in the case of th e A ir Force, the aging Na vy F -4 ’s will lead to a serious gap in combat airc raft in the early 1980’s. This has been long rec­ ognized and accepted. In addit ion —in the case of the Navy—that lig ht att ack A-7 ’s will require replacement star tin g in the mid-198O’s by a more surviv able airc raft ha vin g much greater fighter-like agility. These requirements have been discussed with the Congress in the past and formed the basis for the Nav y develop ing the VFAX requirements which envi­ sioned a reasonably low-cost airc raft op erating in a dual role havin g both figh ter and att ack cap abi lity . I sup port these N avy requ irem ents. They are satisfied in all essential respects by the F- 18. (69 ) 70

F—18 CAPABILITY Now much has been alleged abou t the actual capability of the F-18 or the lack thereo f, both with respect to the ai rc raft it will replace and with respect to the F- 14 which it will complement. By what I consider to be detaile d and rigorous Nav y ana lysis, the F-18 is clearly superior to the F-4 and A-7 which it will replace. In the case of the F- 4, it will have greatly increased air combat maneu vering performance, a be tte r rad ar, more reliab ility, and will come abo ard the carri er more slowly and require less deck space. In the case of the A-7, it fulfills the range-pay load and accurac y require­ ments but with vastly increased agility and there fore survi vabil ity and ca pac ity to act in a self-escort role. W ith respect to the F-14, the re has been too much emp hasis on which air pla ne is superio r or infer ior in sim plistic terms witho ut un derstandin g either th eir mu tua lly com plemen tary and sup portiv e roles or what the Navy is se tting out to achieve overall. The F-14A, with its Pho enix missile system, is a sup erb a ll-w eather fleet air-defense interceptor. Th is is w hat it was designe d to do and it will be unexcelled in that role fo r the foreseeable futur e. It is, of course, excellent also in the more usual fighter roles. But it is large and complex—it is expensive to acqu ire and to ma intain . We sim ply do not need all of this cap ability for every role. We simply cannot afford the space, the man power, and the cost of using the F-14 for all these roles. Th is app lies to both the Navy and the Marine requirem ents. f- is / f-14 comparison The F-18 is a relativ ely small aircraft which, like the Air Force F-16 , builds directly on the pro pulsion and aerody nam ics technology developed and dem onstrated in the lightw eig ht fighter pro gram and on a new gen eration of electronic technology. It is clea rly sup erior to the F-14 in ai r combat maneu vering and, like the F-16, will change the basic tac tics of air combat and will meet the t hr ea t in this area well into the future . The F-14 system with Phoen ix missiles dom inates in long-rang e intercept situ atio ns, while the perf orm ance and ag ility of the F-18 dom inate in scenarios involving classical mixed forc e air combat at shorter range. Like the F-16, it can operate very effectively in a dual cap acity as a fighte r and attack airc raft com plementin g the F-14. The argum ent, if a ny thi ng , is even more com pelling in this case because of the obvi­ ous constraints in manpo wer and space abo ard a carrier. Analogous constraints apply to the field logistics support in the Marine Corps and explains why the M arin es have chosen the F-18. In fact, used with the F- 14 with its two-man crew and very long- ran ge rada r, the cap abi lities of both are mu ltip lied. The overall mix of F-14 fighte r-in tercep tors and the F-18 fighte r-attack aircraft pro­ vide the most relief on space, logistics, and supp ort while sim ult ane­ ously improv ing mission flexibility and effectiveness. And, Mr. Ch airma n, this is my main point. What we are af te r is overall force effectiveness within realistic cost and logistic constraints 71 as we see them in th e future ra th er than su boptimization o f every indi­ vidual element of the force. T his com ple mentarity and interdependence is a ma jor new concept in our force-struct ure pla nning . We believe it is valid. COST OF TH E F -1 8 Now I would like to discuss cost. Th ere has been much confusion in this area with all sorts of num bers and ch arts floa ting around. Some of the confusion results from the use of “life cycle costs” and the models used in their calculation. I would propose instead to exam ine the fundam ental cost elements and the co mparative costs which have been discussed in m any hearing s. In simplest term s, the developm ent cost of the F- 18 includ ing 11 tes t airc raft, testing, test equipment develop men t, as well as the air ­ craft and engine develop ment, is estimated at abou t $1.4 billion in 1975 dollars. T his nu mb er h as been a consistent nu mber in our intern al delibe rations and in ou r testimony to Congress. Th e next num ber is th e unit cost of one of these aircraft. The num­ ber which is least easy to confuse by varying assumptio ns and gro und rules is the unit pro duction or flyaw ay cost, exc luding spa res and star tu p costs. This num ber is $5.8 million pe r weapon system , which is the average cost of pro ducin g 800 F -18 airc raft in 1975 dollars. Again, thi s number has been used con sistently from the time of source selection, and 1 believe it is va lid based on the preparati on for the D SA RC review now underw ay. The oth er element in the overall cost equation is the op erating and support cost. Detailed analyses based on op erating experience, and on the engine and avionics design, show a cost slig htly under $0.9 million per yea r per operational F- 18 airc raft. Again, this is a number which has been stab le throug ho ut our in ter­ nal deliberations and testim ony . It com pares with the op timum an tic i­ pated cost of $1.4 million per year for the F-1 4A. Th is is a one-half million do lla r ann ual cost difference between the F- 14 and F-1 8. One widely discussed com parison is between the cost of a force of F- 18 ’s and addition al F- 14 ’s. Le t's conside r a minimum pro gra m of 800 F -18's a nd look at the elements of cost difference in simple term s: Of the total, rou ghly 500 airc raft will be required to fill the fighte r needs. Un der the most optim istic circum stan ces the un it cost of the F- 14 is $5 million high er than the F-18 for equal pro duction rates. For 500 airp lan es, this amounts to $2.5 billion fav oring the F-18. About 70 percen t of these airc ra ft, or 350, are actually opera ted at any one time. The op erating and supp ort cost savings for 350 F-1 8’s, compared to the same number of F- 14 ’s, then amoun ts to $175 m illion annually, or about $2.5 billion over a 15-year period. We would ac­ tua lly intend to operate the airc raft for longer tha n this. Fo r the rem ain der of the initial 800 ai rc ra ft, the F- 18 ‘s will be used in the atta ck role. The cost would exceed sim ilarly equipped A -7 ’s by about $400 million. However, in the absence of the F-18 , a new att ack aircraft ha ving the same general chara cte ristics as the F- 18 would have to l)e developed and introdu ced by the mid-1980's. The unit cost of th is airc raft would at least equal and probab ly exceed th at of the F -18 because of the lower numbers produced. 72

Offsetting this roughly $5 billion savings is the inv estment cost of $1.4 billion fo r the F-18. Th is is, however, rou ghly com parable to th e$ l billion plu s investment requ ired fo r a new a tta ck airc raft. Therefore—in the agg reg ate —we achieve a net savings in the $4iA to $5 billion range, and t his result will not vary significa ntly for a wide range of assum ptio ns on eith er side.

“break -eve n ” po int The re has been a lot of discussion of the so-called “brea k-ev en po int” on this program —the point where the costs incurred in the new pr od ­ uct are offset by the savings res ultin g from thi s pro duct. My way of getting at thi s point is to ask “how many F-18 's do we need to buy and operatin g be fore we sta rt to m ake a net savings ?” We ca lculate this “break-even” num ber to be about 250 aircr af t—or 350 to 400 if we a p­ ply discountin g. Since we are pla nn ing to buy significantly more than 250 F- 18 ’s— pro bably in excess of 800—and to opera te them over longer than the 15 years used in the calc ulation —probably at least 20 years—th is is clearly a sound investm ent. Any investment involves front-end cost. The main po int here is that the Navy believes this to be a wise i nvestment of our increasingly con stra ined inve stment dollars. We have consciously chosen th is in ­ vestme nt amo ng other prior ities because of its large payoff. I believe that these relative costs pass any test of reasonableness. Fo r exam ple, th e F- 18 weighs about 60 pe rcent of the F-14 a nd has m uch sim pler avionics, so a cost of 60 perc ent as much is reasonable. The same app lies to sup port and ope ration, especially since the F-18 uses a new generation of technologies especially app lied to re­ duce these costs. As compared with the Air Force F-16 , the un it cost will be rou ghly $1 million hig her , again not surpris ing in view of its somewhat grea ter weight and all-weather rada r missile and gro und attack ca pab ility. SU M M ATIO N Tn su mm ary, I have tried to convey that we know what we are doing and why we are doing it. And T believe th at what we are doing is con­ siste nt with the desires of Congress to support us in the development of lower cost approaches to satis fying our military capability requ irem ents. Tn th is case, I believe we have been responsive to congressional direc­ tive. We have in the AF F-16 and the Navy F-18 pro gra ms reversed the upwa rd cost and complexity trends. We have pro totyped and tested these ai rc raft, pro vid ing hig h confidence in the cost and pe r­ form ance pro jection s of both pro grams. Both pro gra ms wa rra nt your full endorsement and support. The only intere sts served by den ying the requested fun ds for the F -18 are those o f th e pro ponents of ex pansion of the high end of the m ix using the old ration alizatio ns of the past and those of the contractors who sta nd to lose as a result of this prog ram . Tn this pro gra m, the Nav y and Marines are ge tting what they want and need fo r their force str uctur e at what I believe to be an ap- 73 prop ria te and affordable cost. I support them and appla ud them in this effort. Now, Mr. Chairma n, th at completes my formal statem ent. I would like to make two oth er com ments th at are not included in the statem ent. One has to do w ith the discussion th at to ok place pr ior to our lunch break on the inten t of Congress and the response of the DO D, OS D and the Nav y with respect thereto. I would like for you and your committee to know th at we spe nt many, m any, l iterally hundred s of hours of our tim e and effort tryi ng to work within the fram ework of the intent of the committee’s charge to us to use a derivative airpla ne. We tried to keep the committees inform ed, as you are well aware. An d in the final process, we secured perm ission from the comm ittee to do wh at we did. So I don’t want it said th at we were fla grant in our course of doing wh at we did, contr ary to the wishes of the Congress. CORRESPONDENCE

Ch airma n McClellan. The corresponden ce advising the com mit­ tee of De partm ent of Defense actions, as well as Ch airma n Mahon’s and my own response, will be inserte d at this point in the record. [The correspon dence fo llo ws :] The Deputy Secretary of Defense, Washington, D.C. Hon. J ohn L. McClellan, Chairman, Committee on Appropriations, U.8. Senate, Washington, D.C. Dear Mr. Chairman : I am writing to inform you of the current s tatus of the Navy’s evaluatio n of proposals for its Air Combat Fighter (NACF). Pursuant to your let ter of November 21, 1974 approximately $12,000,000 of the $20,000,000 appropriated for this effort was applied toward the dvelopment of derivativ e NACF designs by both of the original Air Force ACF competitors. At the time of the Air Force ACF selection las t month the Navy’s own evaluation was still in its early stages. In view of the considerable investment already made toward the design of derivativ e aircraft by the two contractors, we have instructed the Navy to complete its evaluation of both firms’ proposals in a fully competitive atmosphere. The Navy expects to present the resu lts of its evaluation in early May. If none of the proposed designs can satisfy the solicitation criteria we will term i­ nate the present competition and perform further trade off analysis of stated requirements in an attempt to meet the desired goal of a lower cost alternative fighter-attack aircra ft for Navy use. If any or all of the derivative designs are acceptable the Navy will likewise recommend its choice. Should an acceptable design be found it will be necessary to use the remainder of the present appropriation to con tract with the selected firm to refine its de­ sign and sustain its engineering effort pending formal program approval to under­ take full scale development in F \ 1976. I believe this is a prudent course of action whichever firm is selected and I would appreciate your concurrence. We will also advise you should the evaluation disclose a need to revise our current budget figure for this air craft in light of the considerable redirection which has over­ taken its original submission. Sincerely, W. P. Clement, Jr. 74

Congress of the United States, House of Representatives, Committee on Appropriations, Washington, D.C., March 13, 1975. Hon. William I’. Clements, Jr., Deputy Secretary of Defense, Washington, D.C. Dear M r. S ecretary: This is to acknowledge your let ter of March 7th witli regard to the plans of the Department of the Navy to evaluate competitive de­ signs of the Navy’s Air Combat Fighter. You state that the Navy expects to complete its evaluatio n in early May and that if an acceptable design is found, the Navy will use the remainder of the present appropriation, approximately .$8,000,(XX), to contract with the selected firm for design and engineering effort. 1 have no objection to the approach you have set forth. However, the Sub­ committee on Defense Appropriations expects to carefully review the FY 1976 funding requests and I could not comment on possible Committee action on the FY 1976 request a t th is time. Sincerely, George Mahon, Chairman.

U.S. Senate, Committee on Appropriations, Washington, D.C., March 17,1975. Hon. W. P. Clements, Jr., Deputy Secretary of Defense, Washington, D.C. Dear Mr. Secretary : This is in response to your letter of March 7, 1975, con­ cerning the Department of the Navy’s evaluation of the proposal for a Navy Air Combat Fighter. The Navy plans to complete the evaluation within the next few weeks and eith er term inate the competition or conduct furth er tradeoff analysis. If one of the designs is selected. I understand tha t the remainder of the funds appro­ pria ted for the Navy Air Combat Figh ter study will be used to refine the selected design. p ie Committee has no objection to your plans for expending the amount, appro­ priated in fiscal year 1975. I understand tlint you will notifv the Committee of a final selection in May so t ha t the Committee will have the necessary informa­ tion during consideration of the fiscal year 1976 request for the *Navv Air Combat Fighter. With kind regards, I am Sincerely, J ohn L. McClellan, Chairman. BLACKMAIL Mr. C lements . Quite to the contr ary , it caused us considerable worry. \\ e gave it a lot of thought and spen t a lot of effort in tryi ng to do wh at you wan ted us to do. Then, when we found we cou ldn’t, we tri ed to keep everybody in ­ form ed as to wha t we were doing and got perm ission of the com­ mittee to do it. Th e second point T would like to make has to do with blac kmail. It is an ugly word and it is a word that raises my hackles. I would like to say that in almost three years now, I have been in the Dep art­ ment of Defense and OSD, T know of no instance where anyone has been thre atened in any way, shap e or form . . j 6 ™n J tV-X; ^ i e s e Pe °Pl p sitting aro und the table, whether it is A dmiral Hollow ay or pa rt of the people on the OS D staff—like I)r ( urr ie—or in the Nav y Se cre tar iat—like Dr. Po tter and General U iIson—these people know and will tell you, in every instance T know 75 anything about, they have been encouraged to express their views openly and freely. 1 am sure they will do the same with this com­ mittee. I wouldn’t want it inferred otherwise. Thank you. QUESTIONING BY COMMITTEE Chairman M cClellan. Let me ask you one thing. I have gotten the impression th at the same situation prevails now tha t did in old TF X days. I don’t know the true state of affairs today, but you can sit here a long time and never convince me it didn’t prevail then. Mr. Clements. I was not here then, Mr. Chairman. I can’t comment. Chairman M cClellan. Anyway, what we are trying to do here is unravel a problem that is occurring. With respect to the selection of the F-18, was the LTV contested ? Mr. Clements. Yes, sir. Chairman M cClellan. Were they given the same opportunity to develop a plane outside the derivative requirement as was given to McDonnell Douglas? Mr. C lements. Let me explain what happened here. I would be delighted to lay tha t to rest. We had the prototype F-lfi and F-17 built by General Dynamics and Northrop when it was decided that the best procedure would be for the Navy to try to use one of these airplanes and not start a brand new program. These two contractors were contacted and they were told tha t this was the intent of the Navy. I talked to them myself, and I am sure that Admiral Lee did, as well as Admiral Houser and Dr. Currie. We all talked to the contractors and we told them th at they should choose partners, because in both instances—Northrop and General Dynamics—they had not had carrier airplane experience, and tl « Navy felt that this was a situation----- Chairman M cClellan. That was at the inception of the whole program ? sequence of events Mr. Clements. Yes, at the very beginning. They told these two con­ tractors in order to get the expertise that was required, tha t they should go to industry and choose a partner each, and we didn’t care who it was. Rut the requirement should be that they have Navy air­ plane manufacturing experience . . . carrier, capable airplane experience. So it was determined that these two contractors choose their part­ ners. In one case Northrop went to McDonnell Douglas, and in the other instance General Dynamics went to LTV. We, the OSD, Navy, had absolutely nothing to do with it. That was a free choice, and all arrangements were made by the contractors. After they had chosen their partner, proposals went out, briefings took place, and so forth. At that point, we began to hear from LTV and not General Dynamics. LTV took the lead in that relationship because it was going to be a Navv airplane. LTV wanted to start sub­ mitting variations of other than just the one type of airplane. So to make a long story short—and my associates here in Navy can always comment, as they will—in the final analysis, LTV sub­ mitted three airplanes. 76

THREE LTV DE SIG NS The first one was a direct varia tio n of the F-16, and it did have quite a bit of com mon ality to it. They knew, and ackn owledged sub­ sequently, th at it rea lly was not ca rrier capable. There for e, they fel t the need for a no the r airpla ne, so they dev iate d still furth er. Th is one had very lit tle commonality. They decided t hat air plane was not ap prop ria te, eith er, and finally submitted a th ird airpla ne th at was just as different as da ylight and dark. It had no relationship, wha tsoever, to the F-16 —different engine, different size, different weight, different eve rything. So LT V, in this instance, actua lly sub mitted three airpla nes for their proposal. Now, some of my associates migh t c are to comment, and m aybe they can exp and on it if you want more inf orm ation. Ch airma n M cClellan. Th at does not quite answer my question. Mr. C lements . Sorry. I must have misunderstood. Ch airma n M cClellan. A t the time it was determ ined th at neith er could produce a plan e as a derivative of the F-16 and you selected McDonnell Douglas, did LT V the n have the op po rtu nity to subm it a plane, a nothe r proto typ e design ? Mr. C lements . Mr. Chairman, they alread y submitted three. Chairma n M cClellan. I understand. But in all of those times it was still under the con straint of tryi ng to make it a deriv ative of the F- 16 ’s, was it not ? Mr. C lements . Th at is wha t they were tryi ng to do. Bu t at the same tim e No rth rop, McDonnell Douglas just were doing the best they could to submit a deriva tive of the F-17 , which they did. Chairma n M cClellan. But the F-17 was not selected. Mr. C l ements . By the Air Force you mean ? Chairma n M cClellan. Tha t is rig ht. Mr. C lements . But we alread y, before that time, had gone to the comm ittees and told the committees if we were going throug h this exercise, we had to have the concurrence of the committees in Con ­ gress to do this because the Air Force, by this time, had made th eir selection and it would have been a useless exercise. It would have predeterm ined wha t the outcom e would lie. It would have had to be a deriva tive of the F-16, and No rth rop and McDonnell Dou glas would have played no role in tha t. Chairm an M cClellan. Are you con tendin g th at the F- 18 is a derivative of the F- 17 ? Mr. C lements . The re is no question abou t it. It has at least 85 perc ent com mon ality with the YF -17 . Chairman M cClellan. And the other did not have? W ha t pe r­ centage d id it have ? Mr. Clements . I have to ask A dmiral Lee.

F - 1 6 CO M MONA LI TY

Admiral L ee. A s Mr. Clements sta ted . LT V submitted three dif ­ ferent designs, three different proposa ls. Let me give you the com­ monality percentages f or the three. We estimate that the com monality —and I will have to number them , and take them in order. The one that was most sim ilar to the F-1 6. T hey called tha t the “ 1601." 77

Ch airma n McClellan. And what was its percen tage of commo­ nality ? Admiral Lee. It was about 60 percent common with the F-16. Chairma n M cClellan. All rig ht, proceed. Admiral L ee. They submitted an oth er called the 1600, which was rou ghly—and I am giv ing you an opinion at this time , since we didn 't actually count the pa rts —th at it was about 15 percent common with the F-16 . Then they sub mitted still a th ird airplan e and called it 1602. We feel that it was no more than 1 or 2 percent common with the F-1 6. A few thi ng s like the control system, hy draulic system , and so forth . Like the control systems, some intern als were common. But it was no more than 1 or 2 or 3 percent common with the F-16. It was essentially a new airplane . Chairma n McClellan. II ow many pro totypes or designs did McDonnell D ouglas submit? Mr. C lements. Just the one. Chairman McClellan. And the other sub mitted three? Mr. C lements. Yes, sir. Ch air ma n McClellan. Then your co ntentio n is th at they had every oppo rtu nity to compete ? Mr. Clements. Yes, sir. I want to emphasize now. Mr. Ch airma n, th at th e Air Force rejected the YF -17 deriva tives while the Navy was in the process of this eva luation between these two c ontra cto r's teams. We, in good fa ith— really in good fa ith—couldn't just sud den ly say we are not going to consider this oth er airpla ne, because at th at time a sign ificant effort had been made by both co ntr actor s and tha t process needed to go forw ard in a legitimate and completely good-faith manner.

F—18 QUALIT Y

Ch airma n McClellan. Let's talk about the qu ality of the F-18. You heard Mr. Spangenberg 's sta tem ent—would you care to common on it ? Mr. Clements. W ell, I think my statem ent. Mr. Ch airma n, spea ks for itself. I don't agree with George. He knows I don't agree with him. I don’t feel that he is stifled in any way. When he was in the building , I didn 't have any impression he was stifled, either. Ch airma n McC lellan. He made some pretty str on g statem ents about the capability and pe rformanc e of the F-18 . Do you not have any comments on th at ? Mr. Clements. I th ink it would lie entirely a pp ropriate for the Ch ief of Naval O peration s, Adm iral Hollow ay, to respond. Ch airma n McClellan. He can tes tify in a few m oments, if you wish to defer th at question. Mr. C lements. No, sir. I think my statement speaks for itself. Chairma n M cClellan. Senato r Y oung, do you have any questions? Senator Young. Yes, I have one. You stated : We have in the AF F-16 and the Navy F-18 programs reversed the upward cost and complexity trends. We have prototyj>ed and tested these aircra ft, providing high confidence in the cost and performance projections of both programs. I didn't know th e F -18 was a proto typ e. Mr. C lements. Pro bably we are at fau lt here. Senator. Because as we got into the pro gra m, we decided that rather than call it the YF -17 , 78

which was a proto typ e under the auspices of the Air Force, the Navy needed a new num ber. So we ch anged the nu mber from the 17 to the 18. Dr. Po tte r and I did t hat one nigh t about 6 o’clock. T here is r eally no significance to it. Senator Y oung. W ha t about the engine? I un derst and the engine for the F -18 will not be ready fo r 3 or 4 years.

ENGINE COMMONALITY

Mr. C lements. W ell, we a re going to grow the engine. The engine probab ly is about 40 percent, or thereabou ts—and Ad miral Lee might comment, or Admiral House r might comment on it. Bu t the basic engine, the core of th at engine is abou t 40 perc ent of the engine th at was in fac t in the Y F-1 7. Now there is about 60 percent of the engine th at will grow , and it will be different, as you are saying, from the basic YF-17 engine. Ad mi ral Lee, would you care to comment on th at ? Ad miral L ee. Yes, sir. As was poin ted out this mo rning by GAO, one of the allegation s made by LTV involved the F-404 engine. McDonnell Douglas had been allowed to use the new engine. It was rep ort ed in the GAO repo rt th at af ter au ditin g the F-404 engine, it is no thing more tha n a growth version of the YJ -101 , w hich was in the YF-17 and which had been under development since 1971 by General Ele ctric, Nort hro p, and the A ir Force. Th e change from th e YJ-10 1 to th e F -40 4 was m otiv ated by a desire for increased th ru st, which the airplan e needed. The fan diam eter was increased nin e-te nths of an inch. The fan in the fro nt part of the en­ gine, and the afterburne r, the af te rp ar t of the engine diame ter was increased by about 2 inches. The turbi ne inlet tem perat ure was in­ creased by about 50 degrees. The se changes are relatively moderate in going from the Y J-1 01 to the F-404. Your own org ani zation , the General Accou ntin g Office, audited and verified the facts, which I am just giv ing you, in their rep ort. Se nator Y oung. T ha t does not answer my question. General E lec tric will be makin g the engine? Ad miral L ee. Yes. Se nator Y oung. When will they have it rea dy to go in to prod uction ? Ad mi ral L ee. About 1978. Senator Y oung. Th at is abo ut 3 years ? Ad miral L ee. About 3 years. Mr. C lements. Senator, the airpla ne and engine will come alon g together. The engine will not be a delayin g factor in acquisition of the airpla ne. Se nator Y oung. W ill the air fra me be ready before th e engine? Mr. C lements. No, sir. An d I would like to ask Ad mi ral Lee, i f you don't mind. I said it was abo ut a 40/60 part-count commonality. Dr. Currie tells me I am low on it, that i t is much high er th an tha t. Admiral L ee. Yes, sir. We t hink it is much hig her. Maybe 80 to 90 perc ent commonality between th e Y J-101 a nd F-404. Mr. C lements. Th is is important, because this mo rning Senator Goldw ate r was t alking about whether this was, for any practical pur­ pose, a brand new engine, and so forth. A dm iral Lee is say ing that pa rt cou nt between the engine in the YF -17 , which was tested over a p eriod 79 of a lmost 2 years now, is 80 to 85 perce nt the same a s t he en gin e th at is goin g to l>e in the F-1 8. It is very im porta nt. Senator Y oung. That is all, Mr. C hairm an. Ch air ma n M cClellan. Very quickly, the engine in the F- 16 is a Pr att-W hitney , isn ’t it ? Mr. C lements . Yes, sir. Ch airma n M cClellan. And this is GE ? Mr. C lements . Yes. Ge neral Ele ctric. Ch airma n M cClellan. And so fa r it is a bout 60 pe rcent? Mr. C lements . No, sir. T ha t e ngine was flown over a perio d o f about 2 years in the 17 airplan e—th e YF -17. All du ring th e pro totype te st­ ing th at engine was flown and tested. Ch air ma n M cClellan. An d it developed along with the YF -17, then? Mr. C lements . Yes, sir. Ch airma n M cClellan. H ow fa r is it developed now? Mr. C lements . I t has over 700 hou rs on it in flight—flight hours. Ch airma n M cClellan. W ell, are fu rthe r developments being made on th at engine ? Mr. C lements . We are in creasing the t hr us t of it. And by grow ing the engine, we are going to change the p ar t coun t by abou t 20 percent, but the engine will be 80 percent of the basic engine th at was in the Y F-17. Ch airma n M cClellan. Let me ask the n, why will it tak e un til 1978 to develop it, if it is only g oin g to chang e by 20 perce nt ? Mr. C lements . I don’t know. Ad mira l Lee? EN GINE DEV ELOPMENT TIM ETA BLE

Ad miral L ee. Mr. Ch airma n, the YJ -101 engine was a pro totype. Gen eral Electric only built seven of the engines and never had ha rd too ling fo r it. It was str ict ly for the YF -17 pro gra m. Since devel­ oping th at engine—the YJ-10 1—they only ran abo ut 1,200 hours in the tes t cells a nd 700 flight hou rs with the two Y F- 17 ’s. Xow the engine needs the changes I have described. We have to get tooled up for build ing the engine. Also, in the n orm al engine develop ­ ment, we run about 10,000 hours of test cell time to check th e durab ility of e veryt hin g from bearings to turbine blades to th e fan. In a normal developmen t, ab out 10,000 hours of test time. So for these seven engines, we th ink th ey have done rem ark ably well. It was an exp erim ental pro totype engine built by hand, for the most pa rt. We are going to start at the point where the y left off and pick up an ord erly d evelopmen t program an d go throug h these thousa nds of hours of testings, w hich are required to have a reliable engine. We expect to qualify this engine in 1979.

PRODUCTION AGR EEM ENT STATUS

Ch air ma n M cC lellan. Mr. Secre tary, are these two planes , the F-16 and F-18 , a t the stage where we can enter into production agree­ ments? Is tha t w ha t you are p rop osing to do for both ? Mr. C lements . Yes. We are c ertai nly on the 16. We hav e no t reached th at stage yet on the 18. Pe rhap s Ad mi ral Lee would want to com­ ment on w here the Navy is. Or Dr. P otter. 80

Ch airma n M cClellan. I would appre cia te your comm ents, Admiral. Ad mi ral L ee. Yes, sir. O n May 2, th e winner of the source selection was announced. Since th at time, we have been in discussions with Dr. Cu rri e’s office in defining the airpla ne. We also have conducted about 150 tra de studies to try to improve the air pla ne and more pr e­ cisely define the variou s comp onents th at we would like to hav e in it. Now, we are just ab out pr epared to go to wh at is called D SA RC 11, which is the mechanism used in the De partm ent of Defense for the Sec retary to appro ve full-scale dev elopment of a weapons system. We now have sus tain ed eng ineering contracts with McDonnell Dou glas and Gen eral Ele ctric, and full-sc ale development contracts are depend ent on two things. Fi rst, ge tting congressional appro val. The Congress has to appro ve this pro gra m in the fiscal year 1976 budget. Second, g ettin g appro val of the Secretary of Defense throug h the DS AR C process. We are ready to go to the Defense System Acquisit ion Review Committee and get th ei r appro val, pro vided the Congress app roves it beforehan d. Tha t is where we stan d now.

PROTOTYPE PRO CUR EMENT CONTRACTS

Chairma n M cClellan. H ow long will it be or do you anticipa te it will be before we will be in a p osition to mak e p rocurement con tracts? Ad mi ral L ee. Well, we ar e ready now. We have the final pro posals in from Gen eral Electric and McD onnell Douglas, and we can sign a contract with those two companies next week. But—— Chairma n M cClellan . Then you a re read y ? Mr. C lements. Not until you give us the money, Mr. Chairma n. Ch air ma n M cClellan. I un derstand that. 1 was ask ing if you are read y f or procurement money. Ad miral L ee. May I make anoth er comment? This contract we would sign would be for 11 develo pmenta l airplanes. Chairma n M cClellan. The first contr act would be fo r only 11 airplanes ? Admiral L ee. Eleven proto typ e air planes for all the things we have to do to it, from carrier suit ab ility to fatigu e tes tin g to meet all of the perform anc e specifications. Ch airma n M cClellan. I s th at the same situation with resp ect to the F-1 6? Mr. C lements. Yes, sir. It is re ally a test-and-ev alu ation process. Admiral L ee. An d the final pro curement decision, Mr. Chairma n, would not be mad e until about 1978 or 1979. Chairman M cClellan. I see. T ha t is on each plan e? Ad miral L ee. We ll, on the 18, which I am qualified to comm ent on. Mr. C lements. Mr. Chairma n, excuse me. I am not sure I un de r­ stood what you asked, but I would like to comment on you r produc­ tion figures. You used the term “p roduction,” and that is not exa ctly the same term we use. Chairma n M cClellan. Y ou give me the correct term inology and I will ask it th at wav. 81

Mr. Clements. Before we go into what you are terming a produc­ tion contract, we will have to take the 11 airplanes—in the case of the Air Force, I think it is 8—and we are going to have to test those airplanes. This process might go 2 years or 18 months before we make a firm production contract. Now I think that is reallv the answer you were looking for. Chairman McClellan. That is what I was getting at. I recognize that you have to have prototypes for evaluation testing first. But you are ready now for the prototype procurement ? Mr. Clements. Yes.

COM MENTS ON SUGGESTION TO REOPEN COMPETITIO N

Chairman McCleli^ n. This morning one of our colleagues gave us his views on this situation. As I recall, his suggestion was that we should give each contestant another $15 million and let them work on their designs for up to another year before making our decision. He felt it would give us better assurance of achieving the desired results, and in this way, it would make a better contract. What do you think about that suggestion, and what would be the effect with respect to the delay ? Mr. Clements. Mr. Chairman, I was interested in hearing what the Senator said. I knew that he had these kinds of feelings, and I heard him express them before. Frankly, I don’t think a useful purpose would be served by doing what he suggested. First, I think that in a sense of the state of the art, or the technology as we know it today, for these two airplanes and what we are requiring of them and what their mission will be, the gain of taking an additional process of 2 or 3 years—which I think his suggestion would involve—we would not gain in that 2 or 3 years useful technology commensurate with the cost, the time and the effort

effect of delay I think that—and I am dependent upon our advisers in both the Air Force, Navy, and OSD—we would end up with substantially the same airplanes that we have here now in the 16 and 18. If we massage them thoroughly for a couple of years, we would not advance, in any significant manner, the state of the art or the technology as we know it today. Now, it could well be that the Navy—or you should ask them if they agree with that. Because this is a question that there could be some debate on. Chairman McClellan. We will receive their testimony in a moment, but I wanted to ask you that question. Mr. Clements. Do you agree with that ? Dr. Currie. Yes. Chairman McClellan. We respect higher authority. Now that was his proposal, and I believe it applied to all prospective bidders. But suppose it was limited iust to the two original competitors—would your answer be the same ? Mr. Clements. Would be substantially the same. Mr. Chairman, I want to make this clear. I have no background in airplane design and I don’t fly airplanes. This is not my back- 82 gro und at all. And contrary to what has been infer red here tod ay— in my case—the wisdom flows from down upwa rd. I may be making the decision, but you can be sure I am very caref ull y listen ing to the peop le within t.he building , both on the civilia n as well as on the uniformed side, to advise me and give me their best opinions. Chairma n McClellan. I am confident of th at. As a result of th at advice, I wanted your j udgment for the record. Senator Pastore. PRICE ISSUE

Senator P astore. W ho drove up prices on this issue of price? Do you envision th at as be ing a difficult th ing before you ? Mr. Clements. No, sir. I have exp lore d that in some detail with the General Elect ric people, as has Dr. Cu rrie throug h D.D.R. & E. and th e Navy. We also discussed this with our Air For ce associates as to their opinions. Because you must remember th at they were involved in the pro totype eva luation o f t his airpla ne o ver a period o f m onths. I think that we are all of the opin ion th at gro wth possibility is there, and it will not be difficult to achieve. Senator Pastore. Does it encounter any new design ? Mr. Clements. No, sir. Dr. Currie. T o give you an idea, it is abo ut a 6-percent size change from the original YJ -101 engine th at flew’ in the 17 prototy pes. The inlet dia me ter is increased about nin e-tenths of an inch. Th ere are some changes in the back of the engine—the way the fuel and ai r are mixed together. But the core of the engine is exactly the same, identica l in th e p arts. Senator P asture. The same price? Dr. Currie. 1 would say that this pro gra m in this engine develop­ ment, as we hxik a t it now, is coming off a greater base of actu al engine tes ting and design experience than any engine in recent history. Of course, engine tech nology is difficult. But even the F-100 engine, wdiich completed its development almost 2 years ago on paper in the sense of being fully qualified , we have invested well over $100 million in that engine which powered the F-16 and F-15 for t he A ir Force dur­ ing tha t time. And th e changes are roughly comparable. Senator P astore. Wha t puzzles me is you make it sound so simple— that this is wh at you need and this is a pla in way of doing it. Then we have testimony o f a man like Ba rry Goldwater. And those are knowledgeable people. I mean, is this an interservic e c ontroversy? What the devil is going on ? Mr. Clements. I am not sure I know. I would like to know myself. Senator P asture. Here we are with rep uta ble people from the Navy—very distinguished and ded icated people to their country— and the y come and say, “ This is the type of p lane we ought to have a nd at thi s time it will cost us some money.” The n we have other people t ha t say, “ No, d iscard the whole th ing. ” Th is makes an aw fully complex situatio n. To me, it soun ds sim ­ ple. I f this is the plane, th is is the plane. 83

DIFFERENT PRICE STATISTICS Mr. Clements. I sure wish Senator Goldwater and Senator Tower, for example, would have been here with some of the information that perhaps they thought was correct. We could have corrected it for them. Because I really don’t think that some of the basic facts are well understood by them. If our facts are wrong, we want to know it. My God, we have worked untold hours trying to develop this information and to make a careful, well-conceived decision. If we are wrong, we want to know where we are wrong. Senator P asture. From where you sit, I don’t think you are any more favorable to the Navy than Air Force. You are responsible to both. Mr. Clements. I am not at all. That is exactly right. Senator Young. Will you yield there. Senator? You hit the nail on the head. The problem on the floor is they will quote one set of facts and we will quote another. Senator P asture. That is all right. But we are here listening to the testimony and they are not. Naturally, of course, it should lx* in their interest, as much as it is in our interest, to make sure we have the right plane. Mr. Clements. Absolutely. Senator P asture. That is fundamental. I don't know how there can be so much controversy about something that appears to me to be rather simple. Chairman McClellan. Senator Inouye. Senator I nouye. Thank you, very much. Mr. Secreteary, you indicated in the testimony one of the major issues involved in the matter here is cost. You also have correctly de­ scribed some of the data that we have been using and contractor’s various data. Obviously, I am not an expert. Very few of us are experts. We don’t have the wherewithall, the personnel to come through with all of these complicated figures. I have here a simplified set of numbers which I would like your thoughts on. The Department, in 1974 and on to May 6, 1975, claims that the lightweight fighter would be less capable, about half of the cost of the F-14. Is that a correct assessment?. Mr. C lements. Less capable and about half of the cost? Senator I nouye. Yes. Mr. Clements. Yes, sir.

COST COMPARISONS Senator I nouye. The Navy testified that through 1985, the F-18 will cost about $700 million more than the F-14. Mr. Clements. No, sir, that is not correct. Unless you take certain numbers. It depends on what unit cost they are using. Whether they are using 400 airplanes or 800 airplanes, which could affect the unit production costs. Senator I nouye. This is the schedule, that you have the production on up through 1985 ? 84

Mr. Clements. I don’t know w hat it is, Senator. Senator I nouye. Th is is part of the testimony you gave. Mr. Clements. Th is is the total pro gra m, is it? Are you say ing I said that? Senator I nouye. N o, it is the D epartme nt of Na vy’s testimo ny fo r the program throu gh 1985. Mr. Clements. I would like Admiral Houser to comment, because T do n't know wha t the num bers you are using are. Those are his numbers, apparen tly . Admiral H ouser. Th at is probably rig ht, although I would like to confirm it, Senator. We had comp uted a crossover figure for the F -14 and F-18 pro gram which would occur sligh tly af te r 1985. There fore, until th at time, the cost of t he F- 18 pro gram would be more th an the cost o f the F- 14 p rogram . This is not a d irect comp ari­ son of the cost of the airplanes , however, but it reflects how the y would be phased into the inventory differen t productio n rates, and oth er thin gs. It is a total pro gram and not sim ply a com parison of the relative cost of the airplane . Senator I nouye. Bu t the R. & D. inve stment on the F- 14 h as been put tog eth er alread y ? Admiral H ouser. Tha t is correct. Senator I nouye. So we are talking abo ut what would be ap pr o­ priated in the Ap prop ria tio ns Com mittee here? Admiral H ouser. That is correct. Senator I nouye. So you would say th at statem ent is not fa r from wron g? Admiral H ouser. I said that is wh at we testified to then. Senator I nouye. $700 million? Admiral H ouser. T he figure is appro xim ate ly $700 million. There have been some changes since th at time, which would indicate th at mig ht be slightly lower. Senator I nouye. Then for the first 400, using 1975 dollars, you are tod ay sug gesting that the F-1 8 will cost $5.3 billion and the F-14 will cost $4.6 bill io n: is th at about correct ? Admiral H ouser. Ts this on a 400-airplane p rog ram ? Senator I nouye. Fo ur hundred. Admiral H ouser. Yes. Tha t would probab ly be correct on a 400- airpla ne pro gram. We did not design the F-18 pro gra m, however, to build only 400 airplanes . Senator I nouye. Th en on the second 400 F -1 8’s, to replace A-7 ai r­ craft acquisition costs, F- 18 will cost $2.4 billion for t he n ext 400 and the A -7 is $1.66 million. Wo uld that be about rig ht? Admiral H ouser. Th e $2.4 billion soun ds correct. I would like to check the othe r one. sir. [Th e inf orm ation follows:] Four hundred A-7’s would cost .$1.96 billion in fiscal year 1975 dollars.

RAVIN OS IN PR OD UC TIO N COST

Senator I nouye. After these two combine, ma kin g the full 800, unless my mathem atic s is wrong, the 800 F -1 4’s and A- 7’s would cost $6.26 billion and the 800 F-18 's would cost $7.77 billion. And in 1975 dollars, the F -18 cost would be $1.51 billion more. Now I want to know where the savings come in? 85

Mr. Clements. The fallacy of those numbers, Senator —and this is where pa rt of th at confusion comes in—is first of all, when you use the A- 7 num ber out there, this 1.66 figure and you are using t ha t on some volume basis of 3 to 400—I don’t know which------Senator I nouye. Fo ur hun dred ? Mr. C lements . Fo ur hundred. Th at is a fallacy, because the Nav y is no t going to use th at A-7. The y are going to have anoth er a irplan e. If we d on’t buy the F-1 8, and you go to the F- 14 route, sometime in the next 2 to 3 years they are go ing to start a p rog ram on a new attack airpla ne an d you are going to have some R. & D. costs in th ere and you are going to have a unit cost, in my jud gm ent, th at will be high er than the F-18. There is a fallacy in th at kin d of num ber. It is not valid because th at is n ot the way it is goin g to happen. An d the Navy will tell you this. They are going to have to have, or will wa nt and will come to Congress and will valida te a requ irem ent for a new att ack airpla ne, if you give them all F- 14 ’s at this po int. Senator I nouye. Wha t is the cost over a time fo r.t he 14 and 18? Crossover tim e is the question.

CROSSOVER POINT FOR PROCUREMENT

Ad miral H ouser. The crossover point fo r procurement only would come at about 430 to 450 airplanes. Senator I nouye. A t th at point, 14’s and 18’s would be equal to un it cost? Admiral H ouser. N o, sir. The 14’s and 18’s—the pro gra ms would cost the same. Th e F-18 would have cost much less, per unit, but you have to spend the R. & D. fun ds to get the pro gra m sta rte d. When I have an op po rtu nity to speak, I have a graph I think will clear it up. Senator I nouye. Yes. • Admiral H ouser. The fac t of the matter is, Secre tary Clem ents said th ere would be an oth er R. & D. bill th at will have to be paid, a ny ­ way—pro bably on the order of the same amo unt as the F-18. The Naval Air Systems Command has developed a param etr ic, new, light attack airplane in which the R. & D. bill would be only slightly less than that fo r the F-18. Senator I nouye. I f the Navy is called upon to follow Se nator Gold ­ wa ter’s pro posal—t hat is, to stop the pres ent development of the 18 as conceived at this time and to continue the acquisition of the 14 and, at the same time, begin developing a new light at tac k ai rc ra ft— and assu min g th at wh at Senator Go ldw ate r says is c orrect—th at you may be able to develop a light ai rc raft th at would be less expensive than the 18—would you be willing to go throu gh with this? Mr. C lements. I th ink you should ask the Navy.

RAMIFICATIONS OF HALTING DEVELOPMENT OF NAVY F -1 8

Dr. P otter. L et us an swer th is t hing down the line because there are several implications to your question. There is an overall De partm ent of the Navy question. There are different situations within the two se n ices separately —th at is within the Navy and Ma rine Corps. I would like to ask the two service chiefs to resp ond for th ei r services.

60 -913 0 - 75 - 6 86

As fa r as the De partm ent of the Navy is concerned, a delay does two thi ng s to us. If we were to delay the pres ent program by alxmt 1 year however it gets reconfigured or however it comes hack into bein g, the loss of the yea r will means th at we will be fac ing an inevi­ tab le and app reciable shortfa ll in our fighte r inventory . The Navy answer to that problem can be to buy more F- 14 ’s. I would like to ask Admiral Holloway to discuss that. Bu t the impact on the Ma rine Corps is more difficult to describe. The Marines nave chosen, fo r good and sufficient reasons, to go with the F-18. They face a different kind o f problem alxmt the yea rs lo si­ ng. The overall plan of the Departm ent of the Nav y would then be upset considerably by the process of dela y and I think we would, in the end, cost ourselves a gre at deal more money. As a De partm ent of the Navy position, we do not choose to do this. The cha irm an has stated our views c orrectly. Th is is som ething we have tho ught about for a long, long time and we do believe in balanc ing the total De partm ent of the Navy needs. The program we h ave come forw ard with is the one th at best serves the total De partm ent of the Nav y interests. Senator I nouye. I f T may proceed with th at, the question T asked of Mr. Spang enb erg, the whole list of c omparison s—you were here at th at tim e, weren't you ? Dr. P otter. Yes. Senator I nouye. Was the d ata correct ? Dr. P otter. With in my knowledge it sounded like a correct ap ­ pra isal. Senator T nottye. I f that is the case, it would ap pe ar to me—and T am not a pilot—th at the 14 is far superior to the 18 and that the 18 and the 4 would be neck to neck. Dr. P otter. Sena tor, I am not a pilo t, either, nor am I an aircraft designer, so I would like to respond to you from my managem ent understandin g of this situation. I have done in this case precisely what Secretary Clem ents has done—tha t is, tu rn to my military adv isors for questions of militar y adequacy. Mr. Spangen berg is one of the very premier airc raft designers of the Nation and certainly of the Navy. We are very pro ud o f all of the things he has done tec h­ nologically and I t rust his technica l judgment. On ma tters of military utility, however, I turned to militar y people for those answe rs and I will respond to you in the follow ing w ay : Yes, T hea rd all of the num bers a nd I think I understand what those num­ bers mean. Un derstand ing those numbers, tho ugh, does not tell me wheth er they encompass the whole o f military u tility . For th at I have to t ur n to those who have the problem of balan cin g our forces. If my son comes to me and asks fo r a swimm ing pool versus a bad minton court in our bac kyard, I am the one with the overall re­ spo nsibility for balan cin g mv fam ily's needs for clothes and food and recreationa l facilities. In this situation we have a military need th at has to be balance d with many o thers and t ha t is up to our service chiefs on the issue of military utility. I have no quarrel with the numbers, th en: I have a quarrel only with wha t they mean in terms of m ilitar y utility. May I defer now to the service chiefs? Senator I nouye. Yes. 87

MEANING OF DELAY IN DEVELOPMENT

Dr. P otter. There are two questions. The first has to do with the meaning of a 1 yea r delay, and the second with the military meaning of th e numbers? Mr. C lements. T wo years. Dr. P otter Two -ye ar delay. Admiral Holloway. Mr. Ch air ma n, I would like to back off a little bit because I think we have lost the perspective of th e problem. T don't think we can look at the Navy figh ter requirements or the F- 18 pr o­ gra m in isolation, wheth er we are talking abo ut the performanc e of the aircraft or the cost of the ai rc raft or the procurement system. And the reason is: The Navy has many different accounts and yet we have a fai rly finite budget and it is up to the Chief of Nav al Op era tions to make reco mmendations to his Secre tar y to keep all of those pro grams in balance. Fi gh ters have to he balanced with attack airc raft, and num bers of airc raft have to be bala nced against ships, and the procuremen t accounts have to l>e balanced again st the op erat­ ing accounts. We have to make sure th at all of those accounts are prop erl y supported by the man pow er account. Then we nave to supp ort also the Marines because we provide them with th eir ha rdw are. fighter requirements So we have to ma int ain a balance. If we said, “L et’s just take a fighter plane, the best fighte r plan e th at money can buy and star t buyin g it,” we would find ourselves with only fighte r planes, not only without attack airpla nes, but maybe witho ut destroyers, too. We h ave to keep our requirements in min d, and we need to build a plane th at is not only good enough to satisfy these requirements, but we have to have a com binatio n of ships and ai rc raft th at permit the Navy to do its job. Tha t is what we face. In looking at the fighte r requirement, this is wh at we found. We will hav e only 18 squ adrons of F- 14 ’s. We need more fighters. We have an A- 7 that is going to need replacemen t in the middle 1980’s. Whv? Altho ugh it is a magnificent ai rc raft, t he liest lig ht attack ai r­ craft in the world to day , o ur projection s are tha t it sim ply cannot su r­ vive. Regardless of how many bombs it car ries or how fa r it goes, it does not have battlefield survi vabil ity in terms of the agility in the battlefield we project for the middle 1980's. And, th ird, the Comm and ant of the Marine s has recently made the decision, as I am sure he will tell you, the F-14 , because of its sophisti­ cation, is go ing to lie very difficult for him to m ain tain under field con­ dition s, and furth erm ore its capabil ity is so hig h he does not really need all of that capabil ity in h is fighter and attack role. So the Navy pla n—a lre ady havin g 18 F- 14 squadrons, which gives us a very good capability in the fleet ai r defense and the interc eptor are a—was to build roughly 400 F- 18 fighter ai rc raft to supplem ent the F- 14 ’s, then to keep th at productio n runn ing and build 400 attack version s of the F -18 w hich will he used to replace the A-7 . So we have tak en advanta ge of one R. & I), cost to pro vide the Marines with th eir figh ter, to provide a supplem entary ai rc raft to the F- 14 and to pro vid e a follow-on for the A-7. We can’t t ake those thing s, as I say, in isolation. 88

The a lternative plan, as we pointed ont, would have all F- 14 ’s in the VF squadrons. But that altern ate pla n, to my knowledge, neglects the research and development costs required to produce an ai rc raft that will have the performance, to replace th e A -7 10 years hence. We simply can’t go out and pu t a big ger engine in the A- 7 and, perha ps, stre am ­ line it a little bit. I think we will have to build a hig hly capable ai r­ craft. PROGRAM COMPARISONS If you compare the two programs, it is my opinion th at th e Na vy’s pro gram is much more cost effective. T ha t is, the Navy’s prog ram will be more effective across the board ; or, if you tak e a look at effective­ ness, the alternate pro gra m will cost more. As a matter of fact, if you held the costs con stant and tried to do the same job in the alt ern ate pro gra m, it is my prediction you would run out of money befo re you could procure enough air craft to fulfill the num bers required for our squadrons. T ha t is my concern. Now, I agree with you that we cannot buy an aircraft that won't do the job. Th at is why 1 was unaltera bly opposed to the F - 16—because it was a plane that simply would not operate pro perly off o f a carrier. I don’t care if it cost $1 million apie ce; it does not do any good to get som ething th at has to be taken on and off' a ca rri er w ith a crane . We must have an aircraft which will fit ou r needs, and we have th at in the F-1 8. Admiral Lee, who is a technical adv iser to the Chief o f Nav al Op­ era tions and the Secre tary of the Nav y, has said , in his jud gm ent, the F-18 represents, in its price class, the peak of aerospace eng ineering technology at this time . If we delayed and had ano the r com petition, he does not believe we would get an appreciably better airc ra ft in that price class.

CON SEQUENCE OF 2-YEAR DELAY So let us look at what we would find if we delayed for 2 years. L ook­ ing at inflation and more R. & I), dollars going into this com pet i­ tion—and t ha t is exactly what we would be doing—throw ing away an inve stment we had and a dding more money to go throug h the co mpeti­ tion again. There fore, to get the same airc raft, it would cost us more. If we decided not to spend any more money than we alread y had in the pr ogram , we would get a lesser airc raft. The only way we are going to get a b etter a irc raft 2 years from now is to spend considerably more money, because we are t alking about the F-18 being in one price class and the F- 14 being in another. Now. I think from the point of view of th e Chief of Naval Ope ra­ tions th at the worst thing that will happen to us if we d elay, is t ha t for 2 yea rs we are going to see a steadi ly dec lining number of fighters available in the fleet. Now. this is just not a naval prob lem, because those figh ters repre­ sent a national tactica l air asset. When we look at what t he Air Force has available in figh ter aircraft and wha t the Navy has available, thi s is a capability that is going to be attenuated for the country al­ though it will be largely effected in the Navy. Incre asing the Air Force ’s capability in fighters, it is not going to help us because ours 89 are carrier-base d figh ters and will lx* availab le to opera te off of air ­ cr af t carr ier s where no airfield s are available. So, to answer th e question whether we agree with Mr. Spangenberg as to his eva luation of the relative cap abilities of the F—4 versus the F-18 o r the A-7 vers us the F-18 , I think on the cost side we ought to be able to give you a better answer. I think in the question of the performance , cost versus effectiveness, we have to look 'beyond Mr. Spangenberg 's testimony. As Secre tary Po tte r has pointed out, he is one of the most respected in his com­ mu nit y; but nevertheless you cannot a deq uately describe performance , pa rticularly air-t o-air com bat performance , on a sheet of pap er. Now, we have with us tod ay as a backup witness, should the com­ mittee care to call on him. Com mande r McKeown, who has flown the YF -17 and the F-16. He flew the F-4 in combat and he is available to answer any questions the committee might want to pu t to him. Senator I nouye. May I continue? Ch airma n McClellan. Certain ly. Senator I nouye. Admiral Houser, on the first 400, you indicated th at the da ta that was provided by the c ontra cto r—was that the F-18 would be abou t $700 million more than the 14; is t hat correct? Admiral Houser. Sen ator, I di dn 't understand th at the contract or pro vided it. I thou gh t you said the Nav y provided it. Senator I nouye. T he contr actor noted the testimony. Admiral H ouser. If it is in the Navy testimo ny, it was correct at th at tim e based on inform ation we had. Se nator I nouye. N ow, for the second 400, th e F- 18 w ould cost $2.4 bi lli on ; is t hat correct? Ad mi ral H ouser. Yes, sir. Senator I nouye. W hat would the cost of the 400 F- 14 ’s be? Ad miral H ouser. They w’ould not change. They would cost abou t $5 *billion. Since we gave our testimony in May, the re has been a fore cast price increase on the F-1 4. Th is has been reflected in the selected ac­ quisition rep ort w’hich comes to the Congress. I think there is an im po rta nt point to men tion here, thou gh : we do not need 800 more F -14 's. We would n ot buy them in th at quantity. Se nator I nouye. I am talking just abo ut com parable costs because it is supposed to be compa rable to the 14. Ad miral H ouser. The second 400 F- 18 ’s would be ha lf of t he sec­ ond 400 F- 14 cost. If you pu t the R. & D. burden on the first 400 F- 18 ’s the second 400 would be abo ut ha lf the cost of t he second 400 of the F- 14 ’s. AL TE RN AT IVES IF F - 1 8 NO T BUIL T

Se nator P astore. If you did not build the F-18, wh at would have to be vou r course o f action ? Wha t would you have to do? Le t us assume the (Congress stop ped you from ma kin g the F-18. Where do you go from here ? Wha t do you do? Dr. P otter. Sena tor, there are two se par ate issues because th e Nav y has one problem and the Marine Corps has ano ther. May I defer to Ad miral Holloway for th e naval response? Senator P astore. Yes. Do we have to make more F-1 4’s or hav e to app rov e th e A -7 ? What do we hav e to do? 90

Admiral H olloway. Sena tor, first we have to decide whether or not we are going to perm it our militar y capabil ity to withe r away to nothing. We could do nothi ng and sim ply see o ur capability decrease very rap idly. If we w anted to attem pt to ma int ain our naval capabil ­ ity —that is, Navy and Marine Corps—we would have to keep our fighter squadron str en gth up. Tha t means, in my view, we would have to buy more F- 14 ’s. I believe we would the n imm edia tely have to initiate R. & D. for some new kind of a ircr af t, which would be eith er a replacement f or the lig ht attack aircraft, the A-7 , or we would go back and recommend th at we procure a V FAX—that is, an ai rc ra ft t ha t can fun ction as a fighter or a light attac k aircraft. I believe that the Comm andant of the Marine Corps—a nd I would support him in this— would recommend we go for a com bination figh ter and light att ack aircraft which is sim ilar to wh at we h ave in the F-18 because he has fighter needs th at must be fulfilled imm edi­ ately. Senator P astore. If you did th at and you did improve by research your A-7's, would n't you more or less end up with som ething like the F-18 anyway ? Admiral H olloway. Yes, sir. My predic tion is th at it would be 2 years late and it would cost more. Mr. Clements . Not only that, it would be 2 years late, which is going to cause problems within the force str uc ture and it is going to cost more, and th ird, you are going to buy more F-14 's than the Navy really wants in its force structure, which are, in turn , very high-co st maintenance airplan es; so you increase tha t pa rt of it also. This is what I meant a while ago. If we don't do th is, they are going to come in with anoth er airpla ne and we are going to have to go through the R. & I), process and it will just increase the cost. Gen­ eral W ilson has a little different problem.

DEGREE OF IMPRO VEMENT FOLLOW ING 2-YEAR DELAY

Chairma n M cClellan. Will you yield a moment, General, before you begin? While we’re discussing a possible delay. I ’d like to ask— would we have a better plane if we waited two more years? Do you think we could utilize better technologies, and so forth ? Mr. C lements. On both the Air For ce and Nav y side, when we are- evalu ating—and thi s is pertin ent to wha t you asked me—the 16 and 18, or then 17, we asked that very question both ways—the Air Force and the Na vy: If we delayed this question and went throug h more tes tin g and more eva luation and more R. & D. could we come up in a year or two with a better air pla ne in a sign ificant manner? They sa id : “Absolutely not.” I said : “Wh at would be the techn ological gain ?" They s aid : “ Maybe 10 perc ent.” Th at is the answer to y our question. Senator P astore. Th is is on the question of the imp roveme nts of the A-7. If you did not have the F- 18 and you stuck with the F-14 and you knew th at the A-7 would surv ive up to 1985, we w ould n t be here today talking about t he F-1 8; isn't tha t true? Admiral H olloway. I am not sure I got the drift of it. Senator P astore. Pet me do it. aga in. If we could buy F- 14 's and we knew that the A -7 would endure with out improveme nts up beyond 91

1985, that would be a different ball gam e entire ly ; wou ldn’t it? Is n’t the real catch here: No matter wh at we do about the F-18 , you have to improve the A -7 at some point ? Ad mi ral H olloway. Yes. Senator P astore. And by build ing the F-18, that improveme nt will become unnecessary? Ad miral H olloway. That is correct. Ch airma n M cClellan. General Wilson?

F —14 NO T SELE CT ED BY M A RIN E CORPS

General W ilson. Obviously the combat readiness of the entire Ma rine Corps is my responsibility and, when I became the Comm an­ da nt on the 1st of Ju ly , it became quite obvious t ha t an ear ly decision was necessary for me on the F-14's. We were the n pro gra me d to get four F-14 squadrons. I looked a t it care fully and I became convinced—alt hough obviously, as has been ind icated e arlier, the re are many vested interests th at are pu lling a nd tug ging on both sides—I became convinced that the F-14 was no t f or the Marine Corps. It is too expensive and it takes o ne-third more people, 60 perc ent of whom are avionics personnel who have to lie tra ined for 2 years and we would get only 2 y ears of service from these people on the 4-year enlistment and get only a 20-perce nt ree nlist­ ment rate of these ind ividuals because they are in great dem and in ind ustry . In addit ion to this, the logistics supp ort requirements of the F-14 are trem end ous—the addition al costs related to this—and , as of the mom ent, the F- 14 does not have an attack cap ability . I decided to give the Navy those F- 14 squa drons which were desig­ nated for the Ma rine Corps and tak e the F-18. The F-18 will have an att ack capabil ity with an electro-optical system and a las er capa­ bility which is required in a Marine Corps figh ter att ack aircraft. Th ere fore, in response to your question, Senator Inouye, as t o what we w ould do if the F-18 were disapp roved; we would at the moment sta y with the F —4 which we now have. The F—4N’s will be reaching the end of th ei r extended service life at a rate of about two squ adrons each year af te r 1981. We would stav with the F-4 unti l anoth er figh ter attack aircraft could be developed. We do not have the A-7, by the way. CO NSE QU EN CE S OF ONE YE AR ’S DELAY

Senator Y oung. Could I ask one question here? Some say: Wh y can ’t you wait a year? What would be the harm in wa iting a yea r? Gen eral W ilson. We could wait a year and we will just con tinu e to have problem s because we have to have an imp roveme nt sometime, Senator Young. I think it has been clearly established—although I am not an aviator—clearly establis hed th at at some tim e we must have an imp roved figh ter att ack aircraft. We do not have the A-7. We hav e the A-4 for ou r ligh t attack aircraft. But we must have a fighte r and we must have an attack ai rc ra ft; it is almost mandator y th at we have a fighter with a dual capabil ity in the Marine Corps. We need a replacem ent for the F-4 beg inn ing in 1981 because the service life extension pro gra m runs out at th at time. 92

Senator I nouye. W ha t if the Congress ap prop ria ted sufficient fun ds for the Depar tment to carry on an F-18 engine pro gra m and called upon the Departm ent to carry out fu rthe r research and development and to come up with an airc ra ft th at would be much better than the one you have toda y ? Would th at sort of dela y your havin g it? Mr. C lements. Will it cause what? Senator I nouye. Cause you havoc o r problem s? Mr. C lements . I t is going to cause prob lems but I don’t like to thi nk it is going to cause us havoc. Certainl y any delay in a pro gra m in the way of 1 or 3 years ------Senator I nouye. No delay in the engine. Mr. C lements. I understand; it will lx* there. Bu t as the pro gra m is now con stituted, the engine dev elop ment alon g with the air fra me development and the avionics and so forth is all going to come out abo ut even on certain milestones as we move for wa rd in th e critical path of the development. Now. we will have th row n that out of phase if we go forw ard with the development in the a irf rame and th ese avionic pack ages and other aspects of it the n are not bro ught along at the same tim e; so th e pro ­ gram would be delayed, we will lose 1 year or 2 yea rs and it will cause the Marine Corps a problem and the Navy a problem. An d fu r­ thermore, Senator, it is going to cost more money. Now, if I thou gh t—and I am sure the Navy will concur in this; I have not posed the question but I am sure they would—if I thou gh t we could get a significant improveme nt in the techn ological aspect by delay ing this program and recom puting the whole thing , going back to ind ustry and all, I would pro bably be in fav or of doing it. But I don't believe we can and I don't think the Navy believes this, eith er. I ju st don ’t thin k it is possible. Senator I nouye. H ow did the Navy come out—at least in May 1975—th at the cost of the 18 would be consonant with the 14? Mr. C lements . That is about rig ht. Senator I nouye. Y ou never intende d to fly 800 o f the 14’s? Mr. C lements . N o; but th at is not what they are sayin g. They are sayin g: With the program of 800 18's, the cost as a number is about ha lf of the cost of 60 percen t of the cost of the 14’s. Senator I nouye. According to Admiral Houser it won’t come out? Admiral H ouser. Senator, I don't recall that the N avy said th at in Mav. I believe what was said in May of 1974 is that a goal was to be established to design an air plane which would cost about one-half as much as the F-1 4 and weigh about 30,000 pounds. Th at was the goal. We didn ’t quite make the goal. The airpla ne weighs abou t 33,000 pounds an d it will cost appro xim ate ly 60 to 65 percent as much as the F-1 4. To clarifv this m atter of costs, you have to look at common pro duc­ tion rates for the two airplanes . I have a num ber of figures if you would like to see them. I do not believe that in May 1975. we said the F-18 was going to cost th at amo unt but I will check my records. 93 F-14/F-18 COST COMPARISONS FY-75 $

EXPLANATION OF CHART

Mr. C lements . Senator , Gr um ma n’s own figures are $5.8 million as they analyze the F- 18 , to th eir $11 m illion for the F- 14 ’s. Tha t is abo ut a 60-percent fac tor , and those are Grum ma n's num bers at the same r ate of prod uction. He has those crossover curves th at he could put on the screen, which would he lp the discussion. Se nator I nouye. The cost will be an essential element and it would assist me in m aking my decision. Ad mira l H ouser. All r ight, sir. Senator You ng, they are also on the back of my sta tem ent which you have a copy of as well as the vie wg rap h here. Now’, the th ird slide will get to this point which Se nator Inouye bro ught up. Th is is the clearest way th at I could develop to exp lain the relative cost of the airpla ne. Th e solid line on top is the F- 14 pro cured at 60 a year. T ha t is about the ra te we would buy them . Senator I nouye. I thou gh t the most efficient rate was about 100 a year. Admiral H ouser. We had planne d to buy th em at the rat e of six or eig ht per month. We, however, have alread v ord ered 234. We would not build up to a maximum production rate for th e rem ain ing num ber of F-1 4's. These curves are for comparative purposes. Se nator I nouye. Why are you buyin g this at two a month now? Th at is obviously inefficient. Ad miral H ouser. We a re bu ild ing six a m onth at this tim e, Senator, th at is, thr ee fo r the Navy and three for Ir an . 94

Mr. Clements. Let me answer the Se nator on that. It is the lack of funds. If we h ad more money in our ap prop ria tio ns fo r th at pu r pose we would be pleased to buy more airplanes . Tha t is rea lly your righ t answer. Admiral H ouser. The solid line is the F-14 at 60 a year, or 5 a month. The dash line shows the F-14 at 108 a y ear, for com parison purposes only because th at is the rate at which the F- 18 would be p rocured. We would not visua lize buying F- 14 ’s at 108 a year at this time. I call your attentio n next to t his lower line, the broken line. It repr e­ sents F-18 procurement costs alo ne; th at is, with out R. & I). As you can see, it continues to flatten out and it gets to be about ha lf of the cost of the F-14. These other lines for the F- 14 continue str aigh t out with fu rthe r procurement because th e R. & D. ha s been spent and th e lea rning curve alread y e stab lished. If you add the R. & I), costs to the dotted line, you get the line th at parallels the dotted line. The broken line represents F-18 productio n costs plus R. & I)., while the dotted line represents only produ ctio n costs. Mr. C lements . Let me comment a m inute, Bill. Now, the 14 line does not have the sunk R. & D. costs in it ; th at is zero because it is alrea dy spent. Th at is the unit pro duction cost factor. The dash line is t ha t way and the n the dotted line on the 18 is t hat way, and what Admi ral Houser ha s done, he s ay s: Yes; but we will p ut the R. & D. number in the broken line, actually because of the fact we will have to develop tha t atta ck airplane you were talking about a while ag o; you ought to really discard the broken line in the evaluation of these numbers to make it a more simple comparison.

RATE OF PUR CHASE FOR F -1 4 AND F -1 8

Senator I nouye. What is the difference ther e now ? Admiral H ouser. Th is is about the 425 aircraft I mentioned earlier as the crossover point. Th at is the rate we would plan to buy the F -14 compared to the rate at which we would buy the F-18. In the case of the F-18, we w ould lie bu ilding figh ters here and attack planes a t the same tim e, at a rate of 108 a year. Mr. C lements . Y ou d rop down to a zero base —if you do drop down to th at on all three curves the re, th en it crosses the solid line at about the 200 mark ? Admiral H ouser. Yes; about 200. Senator I nouye. You ought to include R. & D. cost ?

r.

Admiral H ouser. The broken line includes R. & D. costs fo r the F-18. The solid and dash lines for the F- 14 do not include R. & D. costs. However, R. & I), funds will have to be expended to develop anoth er att ack airp lan e i f the F -18 is not developed. Senator P astorf.. At th at point, i f you had to include the A-7, what would the R. & H. line look like? Wo uld it still be the same? Mr. C lements . It would be like th at bro ken line. Senator P astore. It would still be the same ? Mr. C lements . Yes. 95

Se nator P astore. In other words, wheth er you th row in research an d development on 18 o r improve ment on A-7, you will end up with the same cost more or less ? Admiral H ouser. Yes, sir. I would like to say that we have not studied in detail the improvem ent to the A-7 . One has been suggested as an interim improve men t. It would exte nd its life for a several-year period but it would not be a tru e replacement. The cost for a true replacem ent would be on the order of this brok en line. I would like to be accu rate w’hen talking about impro vin g the A- 7 rather than rep lac ing it. Im prov ing it would cost somewhat less bu t would not be a long -term solution. At some later time it w’ould still have to be replaced. Mr. C lements . If we did th at , Ad miral Houser, the broken line, would probably go u p or you would need both. Se nator P astore. Any fur th er questions ? Senator Y oung. No. Senator P astore. Have you finished, A dm iral ? Admiral H olloway. Yes, sir. Senator P astore. D o we have a wr itten sta tem ent from you ? Ad miral H olloway. N o, sir; I had no wr itten statem ent. I had prepare d to make rem ark s of t ha t sense. Senator P astore. You did very well. Any fur th er questions ? Mr. C lements . Se nator Y oung, o ur desire is to pass to you and your committee here whatever inf orma tion you need and we will give i t to you just a s factually and in d epth as we possibly can. I certa inly hope we ha ve conveyed it. There is no effort on our pa rt at all to withhold any kin d of information. Se nator Y oung. Y ou have done a good job but the p roblem we have is answering questions that are raised like Mr. Spangenberg stated this afternoon. I imagine those same questions will be made on the floor. W e have to rely on y our testimony to answ er those questions. Se nator P astore. Well, as I get it, he was talking as a technician, as a desig ner; th at is all he had to explain; and I think Admiral Ho llo­ way admits it, bu t goes on to say we have to admi t it, but have to measure i t as to the need. In this matter do you take the jud gm ents of the man th at has to apply and shoot f rom it. PREPARED STA TEMENT We will insert Ad miral Ho user’s prepare d statem ent in the record at this poin t. [The sta tem ent follows :] Good morning, Mr. Chairma n: I welcome this second appearance before you this year on the F-18 and hope that we will be able to answer your questions and also clea r up some misunderstandings surrounding the F-18 program. The conference report leading to the FY-75 Defense Appropriations Act in­ cluded the following lan guage : “The conferees support the need for a lower cost alternativ e fighter to complement the F-14A and replace F-4 and A-7 ai rc ra ft ; however, the conferees direct that the development of this aircraft make max­ imum use of the Air Force Lightweight Fighter and Air Combat Fighter Tech­ nology and hardware.” The conference report added tha t “Adaptation of the se­ lected Air Force Air Combat Fighter to be capable of car rier operations is the prerequisite for use of the funds provided.” This latte r was reviewed by the General Accounting Office whose opinion was published favorable to the Navy on 1 October 1975. 96

Returning to the eurlier stated language, the Navy responded by developing the F-18, an excellent naval aircraft, which is a lower cost alternative lighter to complement the F-14A and replace F-4 und A-7 aircra ft. It makes maximum use of the Air Force Lightweight Figh ter und Air Combat Figh ter technology and hardware. The assignment given to the Navy was not an easy one. It was only through much work between the air craft man ufacturers and the Naval Air Systems Command that a suitable design was achieved. There are some, Mr. Chairman, who believe that capability in new systems is all tha t matters and we should be prepared to spend whatever is necessary to achieve the maximum capability. It is an interesting position to take but hardly one in consonance with reality. We ojierate within well delined boundaries of funds for naval aviation. Our plans are a balance of air cra ft, weapons, sensors, personnel and other factors. For every item that comes to you for funding many competing ideas have been reviewed and discarded as not being either afford­ able or as useful as others. The foregoing is not in any way an apology for the very signilicant capabilities of the F-18. It has the agility, maneuverability and weapons to be an outstanding air lighter. It has the characteristics to serve as a superior tighter escort for a strike group. It also has a modern radar and all-weather missile which make it effective in the maritime ai r defense role at sea. It is not an F-14 replace­ ment but rather, that which we set out to obtain, a lower cost alternativ e fighter to complement the F-14A. It is in the balance of types of air cra ft as well as capabilities that we will achieve maximum effectiveness for the funds provided. Turning now to costs, I call your attention to tlie first graph in your folder. This is a representation of budget accounts of the Navy. Note the generally level tren d of numbers of dollars in the aircra ft procurement accouut compared to all others which are ascending. Tlie purchasing value of these dollars diminishes rapidly through the effects of inflation. Although there lias been a reduction in tlie number of carriers from 17 in FY-72 to 13 at the end of FY-76, the percentage of reduction for carriers is less than that for other ships in the Navy. Through an intensive safety program, tlie equivalent of one year's pro­ curement of tactical air craft lias been saved over tlie last five years as compared to earlier calculated losses. Nonetheless, tlie fact remains that we are procuring fewer airplanes because of the level of funding provided. One result is a major service life extension program as shown on tliis chart in which a large number of naval air craft are operated for one and one-half to two times their original service life at a fraction of tlie cost for procurement of new equipment. It is these airc raft which are wearing out and must be replaced. On the next chart you will see cost comparisons between tlie F-14 and F-18 measured in constant FY-75 dollars. Tlie F-18 is substantially cheaper as it should be since it is a smaller aircraft. Even assuming the large R&D burden to place the aircra ft into production, tlie F-18 is significantly less exjiensive to procure. This chart does not take into account tlie overall operating and support costs which are estimated for tlie F-18 to be less than two-thirds the cost for operating the F-14. This is shown in the next chart which compares annual oper­ ating and support costs for fighter and atta ck planes. Note that the operating costs for the attack version of the F-18 is slightly more than for the A-7, whereas in the case of the fighter it is substantially less than those of the F-14 or the F^4. Life cycle costs are another measure of expenditures. These include develop­ ment, procurement, and operating costs. This chart shows tlie comparison between a force composed of F-14s and a new light attack aircra ft, alternative IA, and one composed of F-18/A-18s, alternative II. A comparison of capabilities is somewhat more difficult to describe but here again we believe we have achieved a lower cost alternativ e fighter to complement the F-14 in the fighter role. Both fighters can be employed in all fighter roles. Tlie F-14 has an advantage in the maritime air superiority witli a corresponding advantage going to the F-18 in close-in ai r fighting. Both aircra ft can escort strike forces and can augment strike air cra ft with air-to-ground ordnance. Thus, tlie F-18 complements the F-14. It has been alleged tha t tlie F-18 is inferior to the F-4. Tiie Navy does not agree w itli this statement. Tlie improved reliability of the F-18, its superior maneuverability, a more versatile radar, greater sur ­ vivability features, and internal gun overcome the benefits of a larger missile load and two-man crew of the F-4. A brief comparison of atta ck capabilities between the A-7 and the A-18 reveals tha t both aircra ft can carry the required weapons and accurately deliver them nt sea or ashore. It is in survivability tha t the A-7 will be found lacking 97 in the mid an d la te eig hties . Th e su pe rior ag ility an d m an eu ve ra bi lity of th e A-1 8 will pe rm it it to func tio n eff ectiv ely ag ain st bo th ai r- an d grou nd -based de fensive syste ms . It als o can se rv e to au gm en t th e fig hter force wh en ad ditio nal fig hters are req ui re d by th e ta ct ic al s itua tion . In su mmary, Mr. Cha irm an , we believe th e F- 18 is a vital pr og ra m fo r the Navy. It is a su jte rior desig n in co rp ora ting th e la te st ae ro dy na m ic desig n, re li­ ab ili ty an d weaponry. NA VY BUDGET ALLOCATIONS $B 98

F-14/F-18 COST COMPARISONS FY-75 $

# AIRCRAFT PROCURED 99 ANNUAL OPERATING & SUPPORT COSTS 1 0 0 CUMULATIVE COSTS (R & D + PRO CU REM ENT + OP ER AT E & SUPPORT ) 40 (W ITH UPDATED COSTS) 9 -3 0 -7 5 35

30 .1 A

/ 25 / z / / / / $ B IL LIO N S / / / / FY 7 5 : / 20 : / .7

Z /- / : 15 / ; / ; / / / / ALT IA ALT II 10 F-14A 74 4 224 A-7E 186 20 2 / . • / / F-18 80 0 / / "V ALX ” 27 5 / / 5 / / / / TO TA L 12 06 12 26 /• 0 76 78 8 0 8 2 8 4 86 88 90 as of FIS CA L YEA R 9 -3 0 -7 5 10 1

A N N U A L CO STS $ F Y -7 5

ALT IAALT II F-14A 744 224 A-7E 186 202 W IT H UPDA TED CO STS F-18 800 VALX 276 9 -3 0 -7 5 TOT AL 1206 122 6

0 I » I 1 " T " " I *------i------76 TQ 78 80 8 2 84 86 88 90 FI SCAL YEA R

LIGH TW EIGH T FIG HT ER PROTOTYPES

Ad mi ral L ee. F or the record, Mr. Ch air man, e arlie r th is aftern oon Mr. Spangenberg mentioned the source selection of the lightw eig ht fighte r pro totypes and mentio ned rum ors and allega tions abo ut how much it was cha nged and so forth . I happen to know th at the source selection au thority is in the room today and maybe you would like to hear his comments on the source selection for the lightw eig ht figh ter pro gra m earlier for t he reco rd to clear up wha t Mr. Spangenberg had to say.

DEPA RTM ENT OF T H E AIR FO RCE

ST ATEM ENT OF LT . GE N. JA M ES STEW A R T, CO MMAN DE R, A ERO ­ NAU TIC A L SY ST EM S D IV IS IO N , W R IG H T-P A TTER SO N A IR FO RC E BA SE , OH IO

SE LE CT IO N OF F - 1 6 OVER F -1 7

Senator P artore. G o ahead. General Stew art , Air Force Systems Com man der, the source selection au thority for th at pro gra m in 1975. General S tewart. Yes, I was the selection au thority for the proto­ types and the Secre tary of the Air Force then subsequently selected between the 16 and 17. There were six differen t designs sub mitted by our gr ou p: One single-engine design and one twin-engine design by General Dynamics, one (lesign by No rth rop , one by Boeing, one by LTV, and one by Lockheed. It was very clear in my eva luation th at the Gen eral Dynam ics’ sing le-engine design and the No rth rop design were the leadin g designs, with Boe ing a close third. T hese were followed by LT V and then Lockheed. After I com pleted my eva luation, I went to Wa shington and con­ sulted with my chief and the Secre tary. I presented my entire evalu ­ atio n to them witho ut nam ing my choice and asked them if they had any addit ion al factors that I should consider, or if the y had a different view poin t on some of my evaluation s. They did not, and my selection was the General Dynam ics and the No rth rop planes. We discussed the fac t th at Boeing was a close third . Senator P artore. Any questions? Mr. C lements . I think it would be also intere sting for General Stew art to comment on any fu rthe r selection for the Air Force and whether or not th at was an ind epende nt choice when you chose the 16 versus the 17. I think that should also go in the reco rd—the final choice. General S tewart. All rig ht, sir. I was the c hairm an of the eva luation committee. I have eit he r l>een the selector or chairma n in the eva luation process for all of the new Air For ce airplan es for the last 5i/ 2 years. The eva luation within the Air F orc e—a nd the re was a consensus within the Ai r Force—was th at the F- 16 was the better buy fo r the Air Force fo r wha t the Air Force wanted to do. Then we had to consult with Secre tary Schlesinger and Secre tary Clem ents, liecause we had to look dow nstream . I would suspect an easier decision for the De partm ent of Defense would have been possible had the Air Force selected the F -17 . localise we would n’t have t he grea t controv ersy we have now. But we selected on the basis of total cost to the Depar tment of Defense and the needs of each service, and the F- 16 was clea rly the choice of the Air Force. I don’t thi nk necessarily the choice was shared outside the Air Force in toto. Mr. C lements . T hat was the point I wan ted to emphasize. It was not sha red, and we knew nothi ng of that choice until he came to us with th eir choice. (10 3) 104

QU ES TI ON S SU BM ITTE D BY SEN ATOR THURM OND

Senator P astore. S enato r Thurmond has sub mitted questions to be answered for the record. Without objection, the y will be inse rted at this point. [The questions and answers follo w:]

Need for Additional Fighters Senator Thurmond. Why does Navy require another air combat fighter in addition to tlie F-14? Why would it not be better to continue expanding the F-14 inventory? Answer. The Navy intends to use the F-18 to replace both F-4 and A-7 a ircraft. All fighters of the Marine Corps and about one-fourth of those of the Navy will he F-18 ’s. The F-18 is the Navy’s response to providing a complementary fighter for the F-14A and replacement for F-4’s and A-7's. It is more economical than the F-14 and has superior air fighting capabilities. A primary consideration is that it permits simplification of the Navy's tactical air craft inventory.

F-14 Inventory Requirement Senator Thurmond. What was the original inventory requirement for the F-14? Answer. The original Navy requirement was for 460 F-14 air craft for carriers. A full fighter force of 42 squadrons subsequently was planned, requiring 722 F-14 ’s for the Navy and Marine Corps.

F-1 4: Primary Mission Senator Thurmond. What is the primary mission of the F-14? If it is fleet air defense, primarily against incoming missile c arriers, how will the F-18 com­ plement the F-14 in tha t role? Answer. Fighter missions of the Navy consist of fleet air defense, long-range fighter escort, and air combat against other fighters. The primary mission of the F-14 is fleet air defense and the F-18 can assist in this role by attacking air cra ft which carry air-to-surface missiles. The F-18 also will complement the F-14 as a long-range escort fighter and in air-to-air combat.

Cost of Additional F-14 Procurement Senator Thurmond. What would the total cost in fiscal year 1975 dollars be to procure additional F-14 aircraft equivalent in effectiveness to 400 F-18’s? Pro­ vide unit procurement costs and consider prior costs as sunk and not usable in the calculation. Use a production rat e of eight per month. Answer. The procurement unit cost of 400 F-14’s at eight per month is about '$12.6 million while the F-18 is about $9.9 million. However, the Navy would require F-14’s at five i>er month rather than eight as in the case for the F-18. On the missions other than fleet ai r defense, effectiveness of both the F-14 and F-18 are adequate. As part of the 800 F-18 buy required for both fighter and attack missions, the procurement unit cost of the F-18 is about .$7.9 million. Amortizing F-18 R. & D. costs over the 800 production aircra ft results in a program unit cost of .$9.6 million.

F-401 Engine Senator Thurmond. If Navy had the option of buying more F-14's, would it require tha t those aircraft have the F-401 engine? If so, include the additional development cost required for the F-401 engine. (Note: Estimated additional development cost for the Pratt-Whitney F-401 is about .$175 million.) Answer. The Navy prefers the F—401 engine to give the F-14 additional thrust and maneuverability but the present engine and airf ram e provide the capability to accomplish F-14 missions. The estimated procurement unit cost of the F-14B at the required production rate is $14.5 million (1975 dollars), plus $175 million R. & D. costs for the F-401 engine. 105

F-18 Requirement Senator T hurmond. What is the Navy’s requirement for an aircraft with the F-18’s performance characteristics? Where in the Navy mission spectrum would this airc raft be used? Answer. The F-18 has been designed to perform several missions for the Navy and Marine Corps. Both services require the F-18 for use in the air-to-air role as well as the air-to-ground role. Sjieed and agility in the future will give pilots a much greater chance for survivability aga inst more advanced enemy defense systems. The F-18 will l>e used as a fighter escort, bomber, flak suppressor, and several other missions that the tactical force commander finds necessary.

Fleet Operations T hreat Senator Thurmond. Does the Navy foresee a threat to fleet operations by enemy fighter air craft? Answer. Yes, the Navy anticipa tes a threa t to fleet operations by enemy fighter aircraft. Anticipated are several types of fighter missions against the fleet; one is the threat of fighters to atta ck airp lane s proceeding to ta rg et s; another is a majo r effort to deny freedom of the sea, by deploying bombers, fighters, an ti­ ship missiles, surface and subsurface st rike; and, a third tyi>e of threa t is the tactical air cra ft strikes [deleted] using fighters as both escorts and bombers.

F-18: Lack of Growth Potential Senator Thurmond. Would you comment on the lack of growth potential of the F-18? Answer. The term “lack of growth potential’’ in the F-18 program comes from those who have not analyzed the carefully designed technology package of the F-18. The Naval Material Command and McDonnell Douglas engineers have devoted many hours to designs that incorporate available new technology. In addition, advance technology studies are being conducted which could provide growth capability in the F-18. Those studies include : modular radar, fiber optics, laser gyros, ECM advance warning systems, ISADC (interim standard airborne digital computer), and DIMAN (digita l integrated multiplexed armament man­ agem ent). All of these new system developments will be compatible to the F-18 as potential growth items if required.

F-18/C arrier Landing Speed Senator Thurmond. What would be its carrier landing speed and how does this compare with the F-4 or F-14? An swer: F-18 ______131-138 Kts F-4 ______139-145 Kts F-14 ______124-129 Kts

F-18/A ir-to-Ground Capability Senator Thurmond. Will the F-18 air-to-ground capability be as good a s the A-7? Answer. Yes, the F-18 air-to-ground capability is a t least equivalent to the A-7.

F- 18 /All-Weather Capability Senator Thurmond. Will the F-18 have a good all-weather capability? Answer. The F-18 will have a good all-weather fighter capability and will have an all-weather attack capability comparable of the A-7.

F-18 Range Senator Thurmond. What radius of action will the F-18 have in the escort role? How does that compare to the F-4 and the F-14? Answer. The internal fuel fighter escort range of the F-18 is [deleted] NM, F-4 [deleted] NM, and the F-14 [deleted] NM. With external tanks, the F-18 can escort to [deleted] NM, the F-4 [deleted] NM and the F-14 [deleted] NM. 106

F-18 Suitability for Attack R ole Senator T hurmond. Since 400 of the proposed 800 F-18's are to be the atta ck version, or A-18, how do we know at tins early stage this air craft is suitable for the atta ck role? How was this evaluated during the source selection process? Answer. During the prototype Hying of the YF-17 (from which the F-18 is a direct derivative) there were specific tests accomplished to prove the bombing capability of the air craft as well as missile and gun firing. All of the engineering and flight performance data has been used in determining that the F-18 would l»e an excellent atta ck airc raft. The precise number of F-18 air craft configured for atta ck missions depends on the requirements of the Navy as the future may dictate. That flexibility is an important factor in the F-18 program.

F-18/A-7 C ost C omparisons Senator T hurmond. What are the cost comparisons of continuing to replace the A-7 force as required, versus procuring 400 A-18's? Answer. Procurement unit cost of the F-18 in the attack configuration as part of the 800 program is .$7.0 million in fiscal year 1075 dollars. If costs of just the last 400 F-18 aircra ft are desired, the procurement unit cost would he $0.1 million. A-7 procurement unit costs would he $4.0 million ; however, additional A-7 aircraft would not satisfy requirements beyond the mid 1980’s.

F-14/F-18 M ix A dvantage Senator T hurmond. Give the advantages of an F-14/F-18 mix on carriers versus more F-14's and a new’ attack plane. Answer. A new attack airplane other than the F-18 would require the same performance and capability as the F-18 and in the smaller numbers it would be procured, would have a higher average unit cost than tha t of the larger number of F-18 /A-18’s. The advantages of the mix of F-1 4/F -18 involves sub­ stantial savings in procurement, operating and support costs. Delay in develop­ ment of a new’ air craft will increase the cost of the a ttack air cra ft in the Navy. The mix of F-1 4/F -18 squadrons will give the force commander more flex­ ibility than the F-14/new attack airp lane mix because of the multimission capability of the F-18 for use as fighter escort, bomber, and flak suppressor.

F-14 R eplacement of A-6 Senator T hurmond. When might the F-14 assume the A-6 role? Answer. One option is to begin replacing the A-6 with a modified F-14 in the early 1980*8. Operational R eadiness of F ighter Senator T hurmond. As I understand it, the fighter version will he built first with the attack version mainly in the second 400 planes. Thus, when would the fighter enter the fleet in wing-size numbers, late or earlier? Answer. The atta ck configured aircraft will follow’ along closely behind the fighter. The fighter w’ill be operationally ready in late 1982 and the atta ck con­ figuration in the mid-1980's.

F-18 /A-7 C apability C omparison Senator T hurmond. Do you have confidence at this time tha t the F-18 attack will he good enough in 1985 and through the 1990’s when today it is about equal to the A-7, a plane which has been in the inventory a number of years? Answer. The Navy has confidence that the F-18 will be superior to the A-7. The F-18 bombing accuracy is at least as good as tha t of the A-7 and with the additional thrust and agility it is evaluated substantially more survivable than the A-7 in the years past 1985. The Navy believes the F-18 with its advanced technology and capability of growth will satisfy fleet light atta ck needs through the 1990’s. Need for N ew N avy A ttack P lane Senator T hurmond. Does the Navy plan to deevlop another atta ck plane in the 1980's if the F-18 is approved? If it is not approved, then when would an atta ck plane be developed as a follow-on to the A7? 107

Answer. The Navy does not plan to develop another light atta ck plane hut will he looking for a replacement for the medium all-weather attack A-6. If the F-18 program is disapproved, the Navy will require a new light attack air­ cra ft no late r than 1985 to replace the A-7.

F-18/A-7 Bomb Weight Capability Senator Thurmond. Can the F-18 carry the same bomb load as the A-7 the same distance? Answer. The F-18 cannot carry the same quan tity of bombs hut is capable of carrying more tonnage from the carrier when l>oth air craft have maximum internal fuel. The F-18 has about 5 to 15 percent shorter range than the A-7 with the design weapon configuration.

Marines Need for F-4 Replacement Senator Thurmond. The Marines now sta te they do not wish to have F-14 ’s. If the F-18 program does not materialize, then what aircra ft would the Marines use to replace the aging F-4? Answer. The Marine Corps currently expects to continue using the F-4 as long as possible for their fighter needs. If the F-18 program is not approved, the Marine Cori»s will he committed to the F-14 or a new development airc raft.

SUB COM MITTEE RECESS

Senator P asture. Thank you very much. The subcom mittee will now recess, an d will reconvene at the call of the Ch air. [Whereup on, a t 5 p.m,, T ues day , October 21, the subcomm ittee was recessed, to reconvene a t the call of the Ch air.]